Can You Get an HSA with Texas Obamacare?

 

If you've been looking into health insurance options in Texas, you might have heard about Health Savings Accounts (HSAs) and wondered whether they can be paired with plans offered on the Texas Obamacare exchange.

Spoiler alert: Yes, you can get an HSA with certain Obamacare plans in Texas!

But there are some specific rules you need to know about to make sure you're choosing the right plan that allows for an HSA.

 

First, our credentials:

In this guide, we'll break down exactly how HSAs work with Texas Obamacare plans, what benefits they offer, and how you can decide if an HSA plan is the right choice for you.

 

This is what we'll cover:

 

What is an HSA

HSA Qualified Plans

Can you get an HSA on Texas Obamacare market?

Why Choose an HSA with Texas Obamacare

Combining Exchange Subsidies with HSAs (the real way to save)

How to quote and enroll in HSA plans through Obamacare

Get help with HSAs in Texas

 

What Is an HSA?

Before we dive into the details of combining HSAs with Obamacare plans, let's make sure we're on the same page about what an HSA actually is.

A Health Savings Account (HSA) is a special savings account designed to help you set aside money on a pre-tax basis to pay for qualified medical expenses. The key benefit of an HSA is that it gives you a triple tax advantage:

• Tax-free contributions: You won't pay taxes on the money you contribute to your HSA.
• Tax-free growth: Any interest or investment earnings on the money in your HSA are tax-free.
• Tax-free withdrawals: As long as you use the money for eligible medical expenses, you won't pay taxes when you withdraw it.

Sounds great, right? It is! HSAs can be a powerful way to save on medical costs and reduce your taxable income.

But here's the catch: Not all health plans are HSA-eligible. For a plan to work with an HSA, it has to be a High Deductible Health Plan (HDHP). We'll explain more about this next.

HSA-Eligible Plans and High Deductible Health Plans (HDHPs)

In order to open and contribute to an HSA, you need to be enrolled in a High Deductible Health Plan (HDHP). So, what qualifies as an HDHP?

Here are the main requirements for an HDHP in 2024:

• The deductible must be at least $1,600 for individual coverage or $3,200 for family coverage.
• The plan must have a maximum out-of-pocket limit of no more than $8,050 for individuals or $16,100 for families.

The idea behind HDHPs is that you take on more responsibility for your initial healthcare costs (the deductible), but you get lower premiums and can save money tax-free in an HSA to cover those out-of-pocket costs.

If you're relatively healthy and don't use much medical care throughout the year, pairing an HSA with an HDHP can be a great strategy. But can you get this combination through Texas Obamacare plans?

Can You Get an HSA with Texas Obamacare Plans?

Yes, you can!

However, not all Obamacare plans are HSA-eligible. To open an HSA, you need to select an HDHP from the exchange.

When you shop for health insurance through the Texas exchange, you'll see different plan levels: Bronze, Silver, Gold, and Platinum. Only certain Bronze plans have HDHPs and are therefore HSA-eligible.

• Bronze Plans: Typically have the highest deductibles and are most likely to be HSA-eligible. These plans are ideal for people who want low monthly premiums and are comfortable paying more out-of-pocket before the insurance kicks in.

If you're specifically looking for an HSA-eligible plan, look for HSA qualified or HDHP next to the plan when you run your quote below. 

Want to learn more about how these plans compare? We've put together a helpful breakdown of HSA-eligible plans in Texas and what makes them different from traditional plans.  Also, how to compare HSA and non-HSA plans in Texas.

Why Choose an HSA with Texas Obamacare?

So, why go for an HSA plan in the first place? Here are some key reasons people love pairing an HSA with their Texas Obamacare plan:

1. Tax Savings

HSAs offer serious tax benefits.

 

By contributing pre-tax dollars to your HSA, you can lower your taxable income for the year. And remember, any money you don't spend on medical expenses rolls over year after year and can grow tax-free. It's like a retirement account for healthcare!

2. Flexibility

HSA funds can be used to cover a wide range of qualified medical expenses, including:

• Doctor visits and hospital bills
• Prescription medications
• Dental and vision care
• Over-the-counter drugs and medical supplies

Plus, once you turn 65, you can use your HSA funds for non-medical expenses without penalty (you'll just pay income tax on those withdrawals, like you would with a traditional retirement account).

3. Lower Premiums

HSA-eligible plans tend to have lower monthly premiums than other plans with lower deductibles. If you're healthy and don't expect to need much medical care, you could save a lot on premiums by opting for an HDHP with an HSA.

4. Control Over Healthcare Spending

With an HSA, you're in control. You can decide how much to contribute (up to the annual limit), how to invest your HSA funds, and when to use them. It's a great way to plan for both short-term medical needs and long-term healthcare expenses.

Want to know more about how HSAs work with Texas Obamacare? We've written a detailed guide on the subject...take a look here.

 

Let's talk about the best part.

 

Combining HSA with Texas exchange subsidies

This is the best best of both worlds and we see significant savings for many people with this strategy.

The whole point (really) of obamacare in Texas comes down to subsidies we can qualify for based on income. 

 

 

 

This addresses the monthly premium you pay for the plan whether an HDHP or standard plan.

 

Learn more on how to get the most out of the Texas exchange subsidy or what income qualifies for a subsidy.

 

Net net...we can save on both the front end (premium) and the back end (out of pocket expenses paid from the HSA).

 

One more secret will pass on....

 

The allowed HSA deduction reduces your AGI on the 1040 tax form which can mean...even more subsidy!

This gets complicated so reach out to us to make sure we're getting the best setup on both fronts.

Zero cost for our assistance:

 

How to Quote and Enroll in an HSA-Eligible Plan Through Texas Obamacare

If you're ready to pair an HSA with your Texas Obamacare plan, here's how to get started:

 

1. Shop for Plans on the Texas Exchange

When you're comparing plans on the Texas exchange, look for HSA-eligible options. You'll see the HSA or HDHP designation by eligible plans and you can even filter for these plans!

Make sure the plan's deductible and out-of-pocket limits meet the IRS requirements for HDHPs. You can usually find this information in the plan details, or you can ask us for help to make sure you're choosing the right plan.

2. Open an HSA Account

Once you're enrolled in an HSA-eligible plan, you'll need to open an HSA account. Many banks and credit unions offer HSA accounts, or you can choose an HSA provider that specializes in these accounts.

3. Start Contributing

For 2024, you can contribute up to $4,150 if you have individual coverage, or up to $8,300 for family coverage. If you're 55 or older, you can make an additional catch-up contribution of $1,000.

You can contribute to your HSA throughout the year and even up until the tax filing deadline for that year (usually April 15th of the following year).

4. Use Your HSA for Qualified Medical and Dental Expenses

You can use your HSA funds at any time to pay for qualified medical expenses. Just make sure you keep records of your medical expenses in case you need to provide documentation for tax purposes.

 

There are usually lots of questions around this whole side of things so reach out to us!

 

Is an HSA Plan Right for You?

Choosing an HSA-eligible plan isn't the right move for everyone, but if you're relatively healthy and want to save for future medical expenses while taking advantage of tax savings, it's definitely worth considering.

If you like the idea of paying lower premiums and having more control over your healthcare spending, an HSA could be a powerful tool for managing your healthcare costs.

 

The HSA makes the most sense IF you're going to actually fund the account!

Need help deciding which plan is right for you? We're here to guide you through the process and help you find the best HSA-eligible plan for your needs.

Get Help with Texas HSA Plans

Ready to take the next step? Talk to a licensed Texas health insurance agent to learn more about HSA-eligible plans and find out if one is right for you.

We're here to answer all your questions, guide you through the enrollment process, and help you save money on your healthcare.

Let's find your perfect plan today!