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Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Any HSA Plans?

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Question: I was reviewing the standard plans on the Covered California site and couldn’t figure out which, if any, of the plans are compatible with health savings accounts. Do you know?

Answer: Correction 7-24-13: “Covered California will offer HSA-compliant high-deductible plans in both individual and SHOP product portfolios”. according to Covered California spokesperson Michael Lujan.


This is great news. As others have pointed out, and HSA works very well for vision, dental and other care AND is MUCH easier for an employer to administer when compared to an FSA or other plans with all sorts of use it or lose it provisions.

THIS JUST IN: According to Covered California’s Michael Lujan in an e-mail message to agents today, “Covered California will offer HSA-compliant high-deductible plans in both individual and SHOP product portfolios”.

Thanks Max. I am a licensed agent and I will not qualify for a subsidy thankfully. My concern was for my many clients who currently have HSA plans and love the ability to actually save for the services we plan on using (dental, vision, chiropractic, acupuncture)on a tax free basis.

Now those clients will have to choose subsidy to offset the higher health plan costs, or HSA account. I happen to serve a community where Western Medicine is viewed as care for sick people and the other services our means of wellness.

Actually, after I posted my reply above, I received an updated post on CA QHPs from Covered California and there is one listed HSA compatible HDHP offering in the silver tier, and apparently is only going to be available in the SHOP exchange, so individual tax credits won’t apply, but employer contributions toward the premium (or HSA contribution?) will probably qualify for a tax credit. Don’t know yet which insurers will be offering it, but it’s there. So all is not lost. If a person is self-employed, this could be a good option.

The only issue some folks might have with HDHPs is the fact that other than preventive care, which has no cost sharing, everything else is out of pocket until the deductible is satisfied. This is perfect for the [younger? healthier?] person who rarely needs medical care and can afford to fully fund an HSA.

The plan has a $1,500 deductible, 20% coinsurance after the deductible until the maximum out-of-pocket of $6,350 ($31,750 total medical expense) is reached. Because the deductible must be satisfied first, the plan has an Actuarial Value of only 71.5%.

When the discussion of “affordable” health care was held, I think they were only thinking about premiums.

Bummer! Was this because the government didn’t want to provide a tax subsidy for a plan that already provided the option for a tax write off?

HSAs only work with High Deductible Health Plans. The Covered California Exchange is only allowing standard HMO and PPO contracts to be offered. You can still obtain a compatible HDHP through a licensed insurance agent, but you won’t be able to obtain a tax credit you might qualify for otherwise.

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