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Healthy NY offers a high deductible health plan (HDHP) that can be used with a health savings account (HSA). As of January 1, 2012, this is the only option available to new enrollees.
A high deductible health plan (HDHP) is a type of health insurance coverage that requires you to meet a deductible before most coverage begins. The HDHP has the same benefits and copayments as the standard Healthy NY plan.
The 2013 deductible is $1,250 for individuals and $2,500 for families. This amount is adjusted annually for inflation.
If you choose the HDHP with prescription drug coverage, then the overall deductible of $1,250 for individual coverage or $2,500 for family coverage also applies to the drug benefit. You will be covered for prescription drugs once you meet the deductible. The deductible is determined on a plan year basis.
You are responsible for the cost of most services until you meet the annual deductible. Only expenses for services that are covered under the Healthy NY benefit package count towards the deductible. You can get preventive services before meeting the deductible. Preventive services include well-child visits, child immunizations, routine prenatal care, prostate cancer screening, mammograms, Pap tests, and adult checkups and immunizations.
Once you meet the deductible, you will only pay a copayment for services.
It is important to note that if you switch health plans, the deductible amount resets to $1,250 for individuals and $2,500 for families.
If you purchase the Healthy NY HDHP, then you may open a health savings account (HSA). You are not required to open an HSA.
An HSA is a type of savings account used to pay for qualified medical expenses such as deductibles and copayments. With an HSA, you can withdraw money tax-free for qualified medical expenses, as defined by the federal government. You can also use your HSA to pay for medical expenses that are not covered under Healthy NY, such as dental and vision care and over-the-counter medication. (However, these payments will not count towards the HDHP deductible.)
You can open and put money into an HSA at a local or online bank. Your insurance company may also have a relationship with a bank that offers HSAs. You should verify any account fees with the bank before setting up the account.
If you open an HSA, you should be sure to save receipts from your qualified medical expenses.
For 2013, you can contribute up to $3,250 for individual coverage and $6,450 for family coverage into an HSA. The federal government sets these amounts annually. You can also roll over money from an individual retirement account (IRA), flex spending account (FSA), or health reimbursement arrangement (HRA) on a one-time basis. You may put money into the account in one lump sum or at any frequency that is convenient for you. You do not have to fully fund the account.
HSAs have several advantages:
Sole proprietors may not contribute to an HSA on a pre-tax basis and may not take the amount of the HSA contribution as a deduction for Self-Employment Contributions Act (SECA) purposes. However, a sole proprietor may contribute to an HSA with after-tax dollars and take an above-the-line deduction.
For more information on HSAs, please visit the U.S. Department of the Treasury Web site.