An Important Distinction
The phrase “I am enrolled in an HSA plan” could mean two things to you.
- I am enrolled in a High Deductible Health Plan (HDHP) that is HSA qualified.
- I am enrolled in a Health Savings Account (HSA) that allows me to save for out-of-pocket medical expenses.
Although it is common to use the term “HSA” interchangeably, it is important to distinguish between your HDHP and HSA plans in an employee benefits program. Although the two benefits are related, commingling these terms can lead to confusion on an already complicated topic.
While these programs can be coordinated, HDHP and HSA accounts are entirely separate plans. Each plan has its own independent eligibility rules, enrollment process, ERISA obligations, contributions, and many other distinguishing factors. Also, while employees are required to have an HDHP to qualify for an HSA account, they are not required to have an HSA account to qualify for an HDHP.
With all the important distinctions between HDHP accounts and HSA accounts, keeping these terms separate will help differentiate between the benefits and hopefully make your employee education program more effective.