Frequently Asked Questions

What is a consumer-driven health plan?
What is a High-Deductible Health Plan (HDHP)?
What is a Health Savings Account (HSA)?
How does an HSA arrangement work?
Who is eligible for a Health Savings Account?
How can I get a Health Savings Account?
Are preventive services and or prescriptions covered by an HSA?
What applies to my deductible?
Can HSA funds be used to cover medical services not covered by my health plan?
Do Health Savings Account funds roll over year after year and get invested?
Who has control over the money invested in a Health Savings Account?
What happens to the money in a Health Savings Account after you hit age 65?

What is a consumer-driven health plan?

Consumer-Driven Health Plans are a new concept in healthcare in which you have control of your healthcare dollars. You control your costs by becoming more educated and involved in selecting and purchasing your healthcare services.

Health Savings Account (HSA) Plans are considered consumer-driven health plans. An HSA arrangement typically involves an HSA-qualified high deductible health plan (HDHP) (like MercyHSA) which provides coverage for medical services, and a Health Savings Account, which is your personal pre-tax funded account, much like a 401k.  It’s your health, and your money—you’re in control.

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What is a High-Deductible Health Plan (HDHP)?

Typically within an HSA-qualified high deductible health plan (HDHP), you carry more of the upfront financial cost of your healthcare by paying a higher deductible. However, with HDHP’s, you may pay less for premiums, which means you can earmark the money you save in premiums towards fulfilling your out-of-pocket expenses. For a list of the IRS requirements for minimum deductible level and maximum out-of-pocket expenses visit www.mercyhealthplans.com or the IRS website at www.irs.gov.

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What is a Health Savings Account (HSA)?

A Health Savings Account (HSA) allows you to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax-free basis, similar to a 401k. HSA’s are available to consumers enrolled in an HSA-qualified high-deductible health plan. Thus, you must be enrolled in a high-deductible health plan in order to have an HSA.

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How does an HSA arrangement Work?

Take the premiums you currently spend on a high cost traditional individual or group plan and split it into two parts. One part will go to pay for the lower cost higher deductible health insurance plan and the other part-- "the amount saved"-- goes into your personal HSA. There is complete flexibility on where the saved part of the premium goes. The savings placed in the HSA can be used for medical expenses until the deductible is met.

Should the need arise for a larger medical expense the higher deductible health plan would kick in and limit the out-of-pocket expenses to the selected deductible each year.

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Who is eligible for a Health Savings Account?

To be eligible for a Health Savings Account, an individual must be covered by a High Deductible Health Plan (HDHP), like MercyHSA, and must not be covered by other health insurance, is not eligible for Medicare, and can't be claimed as a dependent on someone else's tax return.

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How can I get a Health Savings Account?

If you choose coverage with a qualified high deductible health plan (HDHP), like MercyHSA, you are eligible to open a personal HSA with a qualified vendor.  Mercy Health Plans is proud to partner with Bank of America to offer support and administrative services associated with your HSA savings account. Bank of America is one of the nation’s leading financial institutions and a leader in Health Savings Account plan administration. You may choose to utilize this vendor; however, you are not required to do so. You may establish your account with any local financial institution that offers HSA support services.

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Are preventive services and or prescriptions covered by an HSA?

One significant advantage of an HSA-based health plan like MercyHSA is preventive care—the costs of which may be covered before the insurance deductible is met. The goal of having an HSA-based health plan is to stay healthy, so it makes sense that your health insurance covers certain preventive care services and prescription drugs.

There are health services that qualify for preventive care benefits that can be provided without satisfying the minimum deductible. These preventive services may include annual physicals, prenatal care, screening services (e.g. mammograms and prostate exams) and even certain preventive medications. For a complete list of covered preventive care services, see your summary of benefits from Mercy Health Plans.

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What applies to my deductible?

All covered medical expenses apply to the deductible each year including doctor’s office visits, prescriptions, and any major medical claims. For a list of covered medical expenses see your Mercy Health Plans’ summary of benefits.

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Can HSA funds be used to cover medical services not covered by my health plan?

Yes. Because the money in the HSA belongs to you, you can use the funds at your discretion for qualified medical expenses, including dental, vision, and chiropractic care. For a complete list of qualified expenses, visit www.mercyhealthplans.com. or refer to IRS Publication 502 at www.irs.gov.

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Do Health Savings Account funds roll over year after year and get invested?

Yes, the money invested in a Health Savings Account rolls over year after year.

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Who has control over the money invested in a Health Savings Account?

With an HSA, you have complete control.  Think of it like a 401k for your health. 

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What happens to the money in a Health Savings Account after you hit age 65?

You can continue to use your account tax-free for out-of-pocket health expenses. When you enroll in Medicare, you can use your account to pay Medicare premiums, deductibles, copays, and coinsurance under any part of Medicare. The one expense you cannot use your account for is to purchase a Medicare supplemental insurance or “Medigap” policy.

Once you turn age 65, you can also use your account to pay for things other than medical expenses. If used for other expenses, the amount withdrawn will be taxable as income but will not be subject to any other penalties. Individuals under age 65 who use their accounts for non-medical expenses must pay income tax and a 10% penalty on the amount withdrawn.

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