High Deductible Health Plans

• HDHPs have higher minimum annual deductibles than full-coverage plans and a maximum for out-of-pocket expenses. HDHPs typically have lower premiums than other plans.
  
  

Eligibility

• HSA owners must be enrolled in an HDHP. They cannot be covered by other health insurance (with certain exceptions), enrolled in Medicare, or claimed as a dependent on anyone's tax return.
  
  

Uses

• HSA withdrawals may be used for medications, doctor visits, tests, hospital stays and other medical expenses.
  
  

Financial Advantages

• HSA contributions and withdrawals for qualified expenses are tax-free. For the 2010 tax year, a limit of $3,050 may be contributed to an individual HSA, or $6,150 to a family HSA.
  
  

Financial Disadvantages

• In 2010, the minimum annual deductible for HDHPs is $1,200 for an individual and $2,400 for a family, though many plans have a higher deductible (and consequently a lower premium). HDHPs don't pay benefits, except for preventive care, until the deductible amount is paid. For some individuals, a full-coverage health plan is a better choice.
  
  

Availability

• HSAs are available at many major and local investment firms, banks and credit unions, with proof of eligibility.