Learn about the differences between a high-deductible health plan and a copay plan to see which is right for you.
Medical Mutual and your employer are working hard to make sure you have choices and health benefits that fit your medical needs and your budget. If your employer offers a choice between a standard copay plan and a qualified high deductible health plan paired with a health savings account, there are some things you should know to help you choose the right plan for you.
Standard copay plans are for people who want to know upfront what their copays are going to be for doctor visits, prescriptions, hospital stays, and other medical services. With these plans, people pay a higher monthly premium in return for a lower deductible. A qualified high deductible plan allows you to have a lower monthly premium in return for a higher deductible, and covers preventive care at 100%. Because this type of plan gives you more control of your healthcare decisions, it’s considered one of our consumer-driven options. As with all of our plans, you pay our low negotiated rates for doctor and hospital visits, prescriptions, and medical services while you meet your deductible. After meeting your deductible, medical services will either be covered in full, or with coinsurance, depending on your plan design. These plans allow you to open a health savings account, or an HSA. With this type of account you are able to put money aside through pre-tax payroll deductions to help pay for your deductibles, and any coinsurance amounts on a tax-free bases.
Opening an HSA is easy. If you enroll on your own, you choose which bank or financial custodian will handle your account. If you enroll through your employer, they will often make the decision for you. Wherever you open your HSA, the balance rolls over each year and can be used to pay for qualified medical expenses, even if you change health plans, retire, or leave your company. If you qualify, you can even use the money for investment opportunities such as a mutual fund or an interest bearing account. Your earnings are tax free. Finally, you do not pay any taxes on money you withdraw to pay for qualified health expenses. And once you reach age 65, you can also withdraw the money as taxable income for any other purpose.
If you have questions, see your benefits administrator.
Choosing an HDHP with an HSA