Top 10 Reasons Your HSA Does Not Match Your Deductible #4

4. You paid for prior year claims with this year’s funds

Deductibles can be set up in two ways: calendar year, which runs January 1^st to December 31^st each year, or plan year, which runs from the first day of a group’s renewal date to the day before that renewal date the next year (for instance, August 1^st to July 31^st each year). Any claims with dates of service within these time frames apply to those specific deductibles, and at the end of the deductible year, the deductible resets. Billing from providers can sometimes take months, though, and claims from the previous year (and last year’s deductible) can be paid for with the current year’s HSA funds, creating in equal amounts in your HSA and remaining current year deductible.

For instance, let’s say that you have a calendar year deductible of $1000. In December of 2010, you go to the doctor after you twist your ankle. You have x-rays to check for a break, but you are happy to report that the bones are all fine. The doctor sends the claim from your visit for $250 to your insurance for processing. Your insurance applies the first $200 to your deductible but pays the additional $50 because you have now met your 2010 deductible. This processing takes time, and your provider finally bills you in February 2011 for the $200. You started 2011 with $1000 in your HSA, so you use this money to pay for the bill. However, this money was applied to your 2010 deductible, so you now have $800 in your HSA and $1000 to meet on your 2011 deductible.

In March, you twist your ankle again. But this time you actually break it. You see your doctor, get x-rays, are sent to an orthopedic doctor, fit for a walking boot, and have to get crutches. Your claims total $1500 and are sent to your insurance to be processed. Your insurance applies the first $1000 to your 2011 deductible and covers the remaining $500 dollars. The doctors you saw send you a bill for $1000, but you only have $800 in your HSA since you paid for last year’s claim with this year’s funds. You use the $800 left in your account and must pay the remaining $200 out of pocket.

Want to know to rest of the top 10 reasons your HSA does not match your deductible? Check out the McGohan Brabender checklist and look for upcoming and previous articles explaining the other reasons!