An individual HSA health plan works differently from other types of health insurance. In it, a health savings account is paired with a high-deductible plan.
Here is the standard process for these individual health insurance plans:
- You deposit money into an account, which is not taxed.
- You spend the money on various approved medical services and products, including doctor visits, hospital stays, and prescription drugs. There are no co-payments; instead, you’ll have to pay a percentage of their fee, if not the full rate.
- Meanwhile, you pay a low monthly premium.
- If a major medical condition occurs, you are responsible for all of the costs up to the amount of the deductible. Said deductible is usually several thousand dollars. You use the money in the HSA plan to help fulfill it.
- Your personal health insurance will pay a percentage of any remaining expenses over the deductible.
Shopping around for the best deals on health care is extremely important on these plans.
