Are high deductible health plans considered creditable coverage?
Asked by: Clair Kautzer | Last update: August 6, 2025Score: 4.9/5 (52 votes)
What qualifies as creditable coverage?
Creditable coverage: A health plan's prescription drug coverage is creditable when the amount the plan expects to pay for prescription drugs for individuals covered by the plan in the coming year is, on average, the same or more than what standard Medicare prescription drug coverage would be expected to pay.
Is a high deductible plan ACA compliant?
What do HDHPs cover? HDHPs pay for certain preventive care before the deductible – the ACA requires this of all plans – but under an HDHP, no other services can be paid for by the health plan until the insured has met the deductible (or at least the minimum deductible that applies to HDHPs, explained below).
Are HSA plans considered creditable coverage for Medicare Part D?
Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) are not considered in creditability determinations.
Are high deductible health plans pre tax?
A consumer-driven health plan (CDHP) is a high-deductible health insurance plan that allows individuals and families to set aside pre-tax money to help pay for qualified medical expenses. CDHPs are HDHPs paired with HSAs.
Health Insurance Deductible vs Out of Pocket | SAVE MONEY & Understand Your Health Insurance Costs
What is one disadvantage to a high deductible health plan?
Cons of High Deductible Healthcare Plans
For example, someone injured may avoid the emergency room if they know it will result in an expensive bill that will be applied to the plan deductible. This reluctance is especially true for those new to a plan who have not yet established an HSA.
How does a high deductible health plan affect taxes?
High-Deductible Health Plan Tax Benefits
You don't pay federal taxes on the money you put into it. Your total annual contribution is tax deductible. Your money can earn interest, which is also tax-free. Any money you don't spend rolls over into the next year.
Is a high deductible plan creditable coverage?
The HDHPs provide no prescription drug coverage until the deductible is satisfied and therefore, do not provide Creditable Coverage. To qualify as Creditable Coverage, a plan must provide prescription drug coverage that pays at least as much as standard Medicare prescription drug coverage.
What is creditable vs non creditable?
Prescription drug coverage is considered “creditable” when its actuarial value equals or exceeds the actuarial value of standard Medicare Part D prescription drug coverage. It is considered “non-creditable” when it does not provide, on average, as much coverage as Medicare's standard Part D plan.
Can HSA be used for Part D premiums?
The good news: You can keep using your HSA funds
You can even use your HSA to pay for some Medicare expenses including your Medicare Part B, Part D and Medicare Advantage plan premiums, deductibles, copays and coinsurance.
What happens if you have a high-deductible health plan?
A plan with a higher deductible than a traditional insurance plan. The monthly premium is usually lower, but you pay more health care costs yourself before the insurance company starts to pay its share (also called your deductible).
Do high deductible plans pay for colonoscopy?
Colonoscopy as the gold standard for colon screening
Certain preventive screenings are covered at 100 percent under HDHPs, and it is important that you take advantage of these privileges because they are an integral part of wellness and disease prevention.
Can you have Medicare and a high-deductible health plan?
Some people opt to wait to enroll in Medicare and keep their HDHP and their HSA. This is allowed, providing a person has healthcare coverage.
What makes health insurance creditable?
Under §423.56(a) of the final regulation, coverage is creditable if the actuarial value of the coverage equals or exceeds the actuarial value of standard prescription drug coverage under Medicare Part D, as demonstrated through the use of generally accepted actuarial principles and in accordance with CMS actuarial ...
How do I get proof of creditable coverage?
A person will usually receive a Notice of Creditable Coverage in the mail every September, and they should keep this as proof should they later apply for Medicare coverage. If a person wishes to enroll in Medicare after their creditable coverage ends, they may be eligible for the Special Enrollment Period.
Which of the following best describes creditable coverage?
Which of the following best describes creditable coverage? Creditable coverage is prior health insurance coverage, which is used to establish eligibility under HIPAA.
How do I know if my plan is creditable coverage?
You'll get this notice each year if you have drug coverage from an employer/union or other group health plan. This notice will let you know whether or not your drug coverage is “creditable.”
What is credible or creditable coverage?
Creditable coverage is used in two different ways. In general, it is coverage that gives you the right to buy or switch health insurance coverage without penalty, restriction, or waiting period. Different types of health insurance have different creditable coverage requirements.
Are certificates of creditable coverage still necessary?
Plans are also no longer required to issue certificates of creditable coverage after December 31, 2014. These amendments were made because plans are prohibited from imposing preexisting condition exclusions for plan years beginning on or after January 1, 2014. Q2: What is special enrollment?
What is a high deductible plan called?
Refer to glossary for more details. -eligible plan (also called a High Deductible Health Plan (HDHP)) and open an HSA, a type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses (like some dental, drug, and vision expenses).
What is a non creditable coverage?
Your plan has determined that the prescription drug coverage offered by your Employee Benefit Plan is, on average for all plan participants, NOT expected to pay out as much as standard Medicare prescription drug coverage pays. Therefore, your coverage is considered Non-Creditable Coverage.
Who should not use a high deductible health plan?
Namely, you're responsible for paying a larger portion of your healthcare expenses out of pocket. This can be a significant financial burden for those with a lot of medical expenses and could lead to financial strain. HDHPs may not be the best choice for those with chronic or frequent medical needs.
What are the problems with high deductible health plans?
High-deductible health plans (HDHPs) are characterized by higher deductibles and lower monthly premiums compared with a typical health plan. HDHPs may reduce, or delay, needed care, which will ultimately lead to poorer access to care for chronically affected participants.
What are the rules for a high deductible health plan?
Per IRS guidelines in 2025, an HDHP is a health insurance plan with a deductible of at least $1,650 if you have an individual plan or a deductible of at least $3,300 if you have a family plan. The deductible is the amount you'll pay out of pocket for medical expenses before your insurance pays anything.
What is the disadvantage of having a higher deductible?
Cons. Higher deductible: If your deductible is higher, it means you are required to pay for your medical care out of pocket up to that amount before your health plan begins to help pay for covered costs. The exception is for preventive care, which is covered at 100% under most health plans when you stay in-network.