High-Deductible Health Plans: A Way to Save on Taxes
The U.S. government offers employers and employees tax advantages linked to their health plans. High-Deductible Health Plans (HDHPs) typically feature lower premiums and higher deductibles than traditional insurance plans. (As of 2013, HDHPs are plans with a minimum deductible of $1,250 per year for individual coverage and $2,500 for family coverage.)
The big advantage of an HDHP, though, is that members can set up a Health Savings Account (HSA) to pay medical costs, which enables them to deduct as much as $6,350 of those medical costs on their tax return each year. So, an employee could set aside a sum from each paycheck in pretax funds, then, as they use medical services, pay for those services from this HSA fund.