HSA and HDHP with ACA cost sharing

[mjohnsonn]

I signed up for a silver plan with "HSA" in the name. Also, the Washington exchange shows the plan as HSA eligible. The cost sharing subsidy has lowered my deductible to an amount way lower than what it would normally be for a HDHP. I believe I can make a case that I should still be able to have an HSA. I've seen posts on various forums to the contrary. Are these all opinions or does someone have an authoritative source that says I can't have an HSA even though the plan is HDHP but I get a low deductible?

It seems to me that my plan is definitely an HDHP and the deductible is indeed high. I just don't happen to be the one who pays the deductible because of the subsidy. Others are paying the deductible amount for me. Does that make sense? Can I open an HSA as soon as my plan starts?

I'll call Premera later this week, but I'd like to start the ball rolling right away to open an HSA.

 

[ziggy29]

That is an interesting question. I have a plan which would be HSA eligible except that I have no cost sharing or deductible. It feels like cheating to be able to contribute to an HSA in my case, but in reality, I'm not sure whether that is allowed or not. It would be another way to keep my MAGI down if so, but again, that feels like cheating the system to me...

 

[MichaelB]

My guess is no. The policy may be designed to be HSA but for the individual receiving cost sharing assistance the policy is not eligible. See this link CCIIO: HSA plans are still possible | LifeHealthPro

For low-income people who want to use HSAs, the problem is that getting help with paying deductibles could make it impossible for a "qualified health plan" (QHP) purchased through an exchange to meet the HSA program "high-deductible health plan" requirements, CCIIO officials said in the new guidance.

People eligible for cost assistance are below 250% of the FPL. Their taxable income is too low to benefit from the HSA, and this precludes them from using the HSA to reduce their income to become eligible. Makes sense, as does Ziggy's point.

 

[ziggy29]

Makes sense. That would seem to be a pretty slick loophole if it were allowed.

 

[Cedar]

I have the exact circumstance of signing up for a HSA plan and having the cost sharing subsidies reduce my deductible substantially. I called my new insurance company and also ACA and asked the same question. Both told me that the subsidies do not affect anyone’s personal qualifications to contribute to HSA savings account. The plan being qualified is the key! As long as the plan is HDHP approved your subsidies do not affect your eligibility to contribute HSA.

 

[zinger1457]

I'm not holding my breath waiting but sure hope they figure out a way to only give subsidies to those who have a real financial need for it rather than meeting some arbitrary income requirement.

 

[Cedar]

I don’t know of any other way to establish financial need of individuals policy holders, other than with established income requirements. This the fairest method and easiest to administer.

I would like to see our Govt. allow individuals to put up to at least $18,000/yr. with pre-tax dollars, towards paying for their health insurance premiums and deductibles. Then HSA plans would not be needed. All Govt. and Corp. employees, under our existing laws, are able to get health insurance with pre-taxed earnings for themselves, except individuals. This would help level the playing field and make health insurance more affordable to the little guy.

 

[mjohnsonn]

Well the answer is NO we can't get the really low deductible from cost-sharing and have a HDHP. It was too good to be true. We can't per the CMS.gov document here:

http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/marketplace-faq-5-14-2013.pdf

Take a look at the section titled "Cost-Sharing Reductions and Health Savings Accounts"

 

[Cedar]

mjohjnsonn,

I can not open your link. Could you repost the link for we can read what cost-sharing is being discussed. Thanks

 

[MichaelB]

Link works for me. The Q&A related to this follows (my bold type)

Cost-Sharing Reductions and Health Savings Accounts

Q8: How should plan variations for QHPs that are high-deductible health plans (HDHPs) designed to be paired with a health savings account (HSA) be structured?

A8: If an issuer seeks to offer a QHP designed to be eligible for pairing with an HSA in 2014, the issuer must comply with the cost-sharing reduction standards described in 45 CFR 156 subpart E. CMS recognizes that certain plan variations of a QHP may require a low or zero deductible, or that certain services be exempt from the deductible. This may result in the plan variation not meeting IRS standards for an HDHP and therefore not being eligible to be offered in conjunction with an HSA. We recommend that issuers and Marketplaces educate consumers about this issue, both during open enrollment and when an individual has a change in eligibility for cost-sharing reductions. An individual who would not be eligible for the tax advantages of an HSA because the plan variation to which he or she would be assigned does not qualify as an HDHP may purchase the plan without cost-sharing reductions

 

[mjohnsonn]

I was on hold with Premera when I found the link stating we can't have an HSA. When the customer rep finally came on the line, he verified that I can't have an HSA.

Also, even though my plan shown on the Washington exchange had "HSA" in the name, my variation of it won't and I'll see that when my packet arrives in the mail.