A Health Savings Account (HSA) is paired with what type of health plan?

• A. Low-deductible health plan
• B. Traditional PPO with co-pays
• C. HMO with capitation
• D. High-deductible health plan

Answer: (D)

An HSA is paired with a high-deductible health plan. This setup lets you fund a tax-advantaged savings account to cover higher out-of-pocket costs, while enjoying lower monthly premiums from the high-deductible plan. The HSA provides triple tax advantages: contributions are tax-deductible, the funds grow tax-free, and withdrawals for qualified medical expenses are tax-free. The funds also roll over year to year, so you don’t lose them if you don’t spend them right away. Because the HSA must be paired with an HDHP, traditional low-deductible plans, PPOs with co-pays, or HMOs with capitation generally don’t qualify for HSA eligibility, making the high-deductible plan the correct pairing.