Do All High-Deductible Health Plans Have an HSA?

High-Deductible Health Plans (HDHPs) and Health Savings Accounts (HSAs) are often discussed together. While many believe all HDHPs automatically qualify for an HSA, this is not always true. Understanding the specific criteria that link these two financial tools is important for informed healthcare and financial decisions. This article clarifies how HDHPs and HSAs work and what makes a high-deductible plan eligible for an associated savings account.

Defining High-Deductible Health Plans

A High-Deductible Health Plan (HDHP) is a health insurance policy with a higher deductible than traditional insurance plans. This means individuals pay more out-of-pocket for medical services before their insurance coverage begins to pay for non-preventive care. The trade-off for this increased initial out-of-pocket responsibility is typically lower monthly premium costs, making these plans an attractive option for those seeking to reduce their regular insurance expenses. This structure shifts more financial responsibility to the insured for routine care until the deductible is satisfied.

Understanding Health Savings Accounts

A Health Savings Account (HSA) is a tax-advantaged savings account for healthcare expenses. Contributions are tax-deductible, reducing your taxable income. Funds within an HSA grow tax-free, and withdrawals are tax-free when used for qualified medical expenses.

HSAs are owned by the individual, providing portability; the account remains with the individual even if they change employers or health insurance plans. This ownership and triple tax advantage make HSAs a tool for long-term healthcare savings. Funds can be used for a wide range of eligible medical, dental, and vision expenses.

HSA-Eligible HDHPs: The Specific Criteria

While all HSA-eligible plans are High-Deductible Health Plans, not all HDHPs meet the Internal Revenue Service (IRS) requirements to be paired with an HSA. For an HDHP to be HSA-eligible, it must adhere to annual deductible and out-of-pocket maximum limits set by the IRS. Additionally, the plan generally cannot cover any expenses, other than preventive care, before the deductible is met.

For 2025, an HDHP qualifies as HSA-eligible if it has a minimum annual deductible of at least $1,650 for self-only coverage or $3,300 for family coverage. Annual out-of-pocket expenses, including deductibles, co-payments, and other amounts but excluding premiums, must not exceed $8,300 for self-only coverage or $16,600 for family coverage. An individual must also not have other disqualifying health coverage, such as Medicare or a general-purpose Flexible Spending Account (FSA), to be eligible to contribute to an HSA.

Implications of a Non-HSA-Eligible HDHP

If an HDHP does not meet the IRS criteria, it cannot be associated with an HSA. Even if the plan features a high deductible, it does not unlock the tax advantages and savings potential of an HSA. Individuals with such plans cannot open or contribute to an HSA.

In these situations, individuals might explore other options for healthcare savings, such as a Flexible Spending Account (FSA), if offered through their employer. Unlike HSAs, FSAs are employer-owned and typically have a “use-it-or-lose-it” rule, meaning funds must be spent by the end of the plan year or a short grace period. While an FSA can still provide tax benefits for current medical expenses, it lacks the long-term savings and investment potential of an HSA.