Health Savings Accounts & Fixed Indemnity Insurance: Can They Help Make More Affordable Health Care?

Why have a health savings account (HSA)?

Because that kind of tax-favored savings account can help you set money aside to deal with the extra costs, like deductibles, copays and coinsurance, involved in having a health plan.

Why choose a fixed indemnity insurance plan with your HSA and major medical plan?

The same reason. A Hospital and Doctor fixed indemnity insurance plan pays a set benefit to you, or in some cases the provider you choose, for covered medical expenses. That’s money that helps take the sting out of those health care costs you still pay even with health insurance.1

The Hospital and Doctor fixed indemnity plans available vary by state. Check out the options available where you live.


24% of employees enrolled in employer-sponsored high-deductible plans in 2015, up from just 4% of employees in 2006, according to Kaiser Family Foundation.2

According to Benefitfocus, 41% of the employees on their benefits management platform chose a high-deductible health plan in 2016.3

HSA Savings, Fixed Indemnity Insurance Benefits

There’s a rise in the number of people choosing the more affordable health insurance premiums that come with a high-deductible health plan. But saving on monthly premiums often means more cost to meet a deductible before insurance kicks in. Both an HSA and a fixed indemnity insurance plan can help you deal with the increased expenses that come with this type of high-deductible medical insurance plan.4

The HSA lets you carve out some of your income before taxes and put it aside as a safety net of your own money for these medical costs. As an extra incentive, if your HSA is through employment-based health insurance, employers often match some of the funds you save.

The fixed indemnity plan works by paying set benefit amounts for covered medical expenses, some of the most common ones you’re likely to face. You or the provider you want receives the set benefit after you submit a claim for the covered expense. You don’t have to pay a copay, coinsurance, or deductible out of your own pocket to receive the money from a fixed indemnity insurance plan.

Taking Advantage of an HSA or a Fixed Indemnity Insurance Plan

Though both are great tools for helping with medical costs, many aren’t taking full advantage of what these plans offer.

In 2016, those with a high-deductible health plan and a health savings account contributed on average only 40% of the annual maximum they could to the account, leaving some of the tax benefits and employer contributions unused.3

Also, though hospital indemnity insurance or similar hospital and doctor fixed indemnity plans provide those who use them with benefits “when they encounter unexpected medical expenses,” Benefitfocus found only 36% of large employers offered those plans and few people enrolled (14% of employees tracked in the 2016 report).4

The message is clear: Help exists for both expected and unexpected medical costs. Use these two tools close at hand.

If you have an HSA available, use it to its fullest.

And if your employer doesn’t offer fixed indemnity insurance or if you’re shopping for insurance on your own, learn more about indemnity plans for individuals and families with almost any budget or lifestyle. These plans can provide that insurance benefit to make your medical expenses more manageable.


Note: Some fixed indemnity insurance plans may have a benefit reduction “deductible” option. This isn’t the kind of deductible where you pay your money to cover it. Instead, you choose a lower premium and agree to reduce the benefit you’re paid by a certain amount. Check any fixed indemnity insurance plan you intend to buy for more details.


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1 THIS PLAN PROVIDES LIMITED BENEFITS. This is a supplement to health insurance and is not a substitute for the minimum essential coverage required by the Affordable Care Act (ACA). Lack of major medical coverage (or other minimum essential coverage) may result in an additional payment with your taxes.

2 Murphy, Brooke. 21 statistics on high-deductible health plans. Becker’s Hospital CFO. May 19, 2016.

3 Benefitfocus. The State of Employee Benefits: Insights and Opportunities Based on Behavioral Data. Large Employer Edition, 2016.

4 HSAs are not available solely in conjunction with fixed indemnity insurance plans. You must have a qualifying high-deductible health plan to qualify for an HSA.


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