Do You Still Pay a Copay for Prescriptions on an HSA Insurance Plan?

With a Health Savings Account, you may be responsible for copays, coinsurance or both. A copay is a preset dollar amount that you pay up front at the time of an office visit or when you pick up a prescription. Coinsurance is a percentage of medical charges that you are responsible for. Some health care providers request the coinsurance dollar amount when you visit their office, others will bill you later. Prescriptions usually involve copays. Prescription costs count toward both your deductible and your maximum annual out-of-pocket expenses.

For 2018, an individual can contribute up to $3,450 to their HSA. It’s $6,900 for a family. The health plan that your HSA is tied to must have a minimum deductible of $1,350 for individuals, $2,700 for families. The 2018 limit on annual out-of-pocket expenses is $6,650 for individuals and $13,300 for families.

HSAs were designed to supplement health care plans that have high deductibles. High deductible health care plans are sometimes referred to as “catastrophic coverage” because they kick in only when medical costs run very high, like when you need major surgery. HSAs help you cover costs that occur before you meet that high deductible or if you don’t meet it all for the year. You can pay out-of-pocket costs from money in your HSA, which is a tax-free savings account with investment options. Premiums are not out-of-pocket costs, but copays are, and so is coinsurance.

The Affordable Care Act requires insurers to pay 100 percent of your medical costs after you reach your annual out-of-pocket maximum, but there are variations in the method insurers use to cover prescriptions. Some require you to pay for the medicine yourself using the insurer's discount card, and then file a claim for reimbursement. That may help lower premiums, but brand-name prescriptions can cost hundreds of dollars. You need to be okay with waiting to get that money back. All plans provide preventive services required by the Affordable Care Act at no extra cost.

Some HSA plans have coinsurance for prescriptions and will pay 60 percent of your prescription costs after your deductible is met. Others will pay up to 80 percent. The percentages apply only to the money you spend between meeting your deductible and hitting the annual out-of-pocket maximum.

HSAs have many variations. There are plans that only pay for medications on their formulary, as insurers' drug lists are called. Essentially all insurers have formularies, but many pay part of the cost for off-formulary drugs. Formularies often separate drugs into price groups called tiers, and charge higher copays for the pricier tiers. The Affordable Care Act sets minimums for formularies, but if you use an expensive medicine regularly, you'll want to make sure it's there before you sign up for the plan.