Insurance law — do I qualify for an HSA?

It is no secret that health care is expensive. Men and women in Washington often rely on health insurance to cover at least a portion of their medical expenses, but still come up short when it comes time to pay medical bills. A health savings account — HSA — is designed to cover some of those leftover costs. Whether someone qualifies for an HSA is up to insurance law, though.

An HSA is an account that can only be used for health care related expenses. Policyholders can contribute a portion of their pretax earnings, which means that they are both setting aside money for medical care but also securing a helpful tax benefit. HSA savings do not incur taxes and there are no penalties for using the funds. It is also possible to lower one’s tax bracket by contributing enough pretax income.

Not everyone can get an HSA, though, as they are only intended for people with high-deductible health plans who do not have any other health insurance coverage. Exceptions to this include dental care, vision care and supplemental insurance used for specific illnesses. Deductible limits differ based on whether the insurance covers only a single person or a family.

Having an HSA can be an invaluable tool for someone who has a high annual deductible. Unfortunately, there are possible downsides. The insurance company might say that it is not responsible for paying its fair share, insisting that a specific cost must be paid from the HSA. This can be an extremely frustrating situation, so some find it helpful to reach out to an experienced attorney who is well-versed in Washington insurance law.