Health, Taxes and Savings
Why high deductible health plans are growing in popularity.
We’re one week into the 2021 federal benefits open season, but you still have plenty of time—until Dec. 13—to make changes to your health plan choices.
One choice that’s growing in popularity in the Federal Employees Health Benefits program is high deductible health plans, which have been available through FEHB since 2005. Some participants in HDHPs can establish health savings accounts to pay for medical expenses. HSAs earn tax-free interest and unused contributions roll over from year to year.
When you enroll in a high deductible health plan, the plan determines whether you are eligible for an HSA or a health reimbursement arrangement. HSAs are available to those who are not enrolled in Medicare, cannot be claimed as a dependent on someone else’s tax return, have not received Veterans Affairs or Indian Health Service benefits within the last three months, and don’t have other health insurance coverage.
In 2022, for each month you are eligible for an HSA, you will receive a premium pass through, which is portion of your monthly health plan premium that is deposited to
your HSA each month. You can make additional tax-free contributions to your HSA, as long as total contributions do not exceed $3,650 for an individual and $7,300 for a family.
In many of the FEHB HDHP plans, the premium pass through amount ranges from $75 to $100 per person per month, which can go a long way toward offsetting the high deductibles that are inherent to this kind of plan. There’s no time limit for withdrawing money from an HSA to pay for expenses.
After you turn 65, you can use HSA money tax-free to pay premiums for Medicare parts B and D, in addition to paying for other out-of-pocket medical expenses. But you can't continue to make contributions to your HSA once you are in Medicare.
In that case—or in other circumstances in which you have other health coverage—your HDHP will provide a health reimbursement account instead. This gives you an annual credit equal to the amount of the premium pass through that you can use to help pay your deductible and certain other expenses.
In addition to HSAs, federal employees also can set up limited expense health care flexible spending accounts to cover out-of-pocket dental and vision expenses. With a LEX HCFSA, you can set aside anywhere from a minimum of $100 to $2,750 per benefit period.
There are tax advantages to fully funding your HSA as quickly as possible. Your HSA contribution payments are fully deductible on your federal tax return. By fully funding your HSA early in the year, you have the flexibility of paying medical expenses from tax-free HSA dollars or after tax out-of-pocket dollars. If you don’t deplete your HSA and you allow the contributions and the tax-free interest to accumulate, your HSA grows more quickly for future expenses.
The FEHB HDHP plans for 2022 include:
- Aetna HDHP, plan code 22, most of the U.S.
- Altius Health Plan HDHP, plan code 9K, Idaho, Utah, Wyoming
- BlueAdvantage HMO HDHP, plan code WW, Colorado
- CareFirst BlueChoice HMO HDHP, plan code B6, D.C., Maryland, Virginia
- Florida AvMed (HMO) HDHP, plan code WZ, Florida
- GEHA Nationwide HDHP, plan code 34
- Healthkeepers HMO HDHP, plan code 9V, Virginia
- Humana HMO HDHP, many locations, plan codes vary by location
- Independent Health HMO HDHP, plan code QA, New York
- Kaiser Permanente HMO HDHP, plan code L1, Washington
- MHBP HDHP, plan code 48, nationwide
- Optima Health HMO HDHP, plan code PG, Virginia
- Select Health Plan HMO HDHP, plan code WX, Utah
- TakeCare HMO HDHP, plan code KX, Northern Mariana Islands, Guam, Palau
- UnitedHealthcare HDHP, many locations, plan codes vary by location
- UPMC Health Plan HMO HDHP, plan code 8W, Pennsylvania
To learn which plans are available where you live, check OPM’s Health Care Plan Information Page.
For 2022, HDHPs have a minimum deductible of $1,400 for self-only coverage and $2,800 for self and family, the same as 2021. The 2022 HDHP maximum out-of-pocket amounts—which include deductibles, coinsurance and copayments, but not premiums—is limited to $7,050 (up $50 from 2021) for self only plans and $14,100 (up $100 from 2021) for self plus one and self and family enrollments.
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