How Does HSA Payment in Medical Billing Work?

HSAs are a popular choice for anyone covered under an HDHP when saving for his or her medical expenses. However, when it comes to making payments, practices must be prepared. HSA debit cards are a convenient option. However, practices need to ensure they have the facility to process such payments. Here, we look at how HSA payments in medical billing work.

What Is An HSA?

An HSA or Health Savings Account is an account with tax advantages. Designed for people with HDHPs (high-deductible health plans), it helps individuals save for medical expenses that their HDHPs don’t cover. The individual or his or her employer make contributions into the account during the year. Those contributions are then invested and used to pay for certain medical expenses. These may include dental care and medications from the pharmacy.

How Do HSAs Work?

HSAs help individuals to cut their costs when faced with high deductibles. With more people paying more out-of-pocket than ever before, it is no wonder that HSAs are so popular. For individuals, an HDHP has a minimum deductible of more than $1,000 and a maximum deductible of more than $6,000. When it comes to families, the minimum starts at almost $3,000 with the maximum being more than $13,000. These sums are clearly very high, even for higher income families.

The individual has made a payment for his or her portion of the claim. Then, his or her insurer will pay the remainder. Let’s assume that someone with an HDHP has a medical bill of $3,500. His or her deductible stands at $1,500. The individual must pay that $1,500, which leaves the insurer responsible for only $2,000 of the total. When it comes to supplementing those out-of-pocket costs, an individual may use his or her HSA.

Who Can Qualify for an HSA?

Individuals with an HDHP could qualify for HSAs. Usually, an insurance provider will offer it and pair it with a qualified HDHP. Several financial institutions offer them as well. For someone to qualify for an HSA, he or she needs to be an eligible taxpayer. He or she must also have a qualified High Deductible Health Plan and no other form of health coverage. The person must not have Medicare or be a dependent on another person’s tax return.

Contributions to HSAs

Eligible individuals may only contribute to their HSAs using cash. An individual’s employer or another family member can fund an employee-owned HSA. Self-employed and unemployed people can also make contributions to an HSA as long as they meet the qualification criteria.

There is a limit to the amount that a person can contribute to an HSA in a year. Individuals can contribute up to $3,500 for themselves. If they have a family, they can contribute more – $7,000 maximum. Individuals over the age of 55 can contribute an extra $1,000 annually.

Withdrawing from an HSA

There’s no tax on an HSA withdrawal as long as it’s being used to pay for a qualified medical expense. This includes dental care, deductibles, vision care, copays, prescription medication, and psychiatric treatment. When there are withdrawals for other reasons, the government charges income tax plus an extra penalty of 20 percent.

What Happens When You Pay with an HSA?

If you visit the doctor and have an HSA, you won’t need to pay your copay when receiving treatment. Instead, you’ll present the practice with your insurance card. The invoice will have any necessary deposit applied to it. People can use HSA funds to pay for any qualifying medical expenses even when they aren’t covered by the insurer. Your healthcare provider will bill your health plan and submit his or her claim for your treatment. Your insurance provider will send an Explanation of Benefits (EOB). This outlines your charges and summarizes your co-insurance and deductible totals. Then, you will receive an invoice from your healthcare provider. This will reflect your charges. You should make sure that the amount your provider is charging matches the figures on your health plan’s EOB. If your provider is capable of processing HSA payments, you can use your HSA account to pay your invoice.

Accepting HSA Payments

The best payment processing providers offer the option for HSA payments in medical billing solutions. BillingTree offers HIPAA-compliant and convenient solutions for collecting both post-care and on-site payments from HSA accounts. These healthcare payment solutions allow patients to pay online or via phone at the time of their choosing. BillingTree makes it easy for providers to accept HSA payments to allow for maximum flexibility for patients. By offering a wider range of payment possibilities, it also helps practices to keep their revenue streams operational. As a result, both practices and patients can enjoy all the benefits that come with convenience and flexibility.