Health plans that require consumers to pay a large deductible are sometimes linked to a health savings account (HSA) to help consumers pay for medical care. Two main types of individual HSAs are paired with high-deductible health plans (HDHP). HSAs are individual savings accounts to which employees and their employers can make tax-free contributions. Withdrawals are also tax-free so long as they are used for allowable health care expenses. HSAs can only be paired with health plans that have at least a $1,200 deductible for an individual plan or $2,400 deductible for a family plan (these amounts are adjusted annually for inflation). Individuals can get an HSA from their employer or open one on their own through a financial institution.
Health Reimbursement Accounts (HRA) are established and funded solely by an employer. Employer contributions to these accounts are not taxed. HRAs are often paired with high-deductible health plans (HDHP) because they are intended to cover medical costs not covered by the plan, but unlike HSAs, they are not limited to HDHPs.
High-deductible plans don't always include an individual savings account to fund costs not covered by the plan. In fact, more people are enrolled in HDHPs without individual savings accounts.