Combining An HDHP With A Regular Health Insurance Plan

I recently discovered something about my high-deductible health plan that I never realized. Despite only having a high-deductible health plan for myself, it turns out that all of the qualified medical expenses that my family incurs are eligible for reimbursement from my health savings account, even though none of my family members are on my health plan. This is a fairly big deal for me, as it adds up to much more potentially triple-tax advantaged savings for me that I didn’t realize I had.

A Brief Primer on HDHPs and HSAs

As a bit of background, a high-deductible health plan (referred to as an HDHP) is a type of health insurance plan that, as the name suggests, comes with a high deductible. HDHPs are legally defined health insurance plans that must meet certain requirements to have the HDHP label, so if you have an HDHP, it will be labeled as such and you’ll know that it’s an HDHP.

The main reason you might want an HDHP is because it comes with lower monthly premiums. If you’re generally healthy and not a heavy user of health insurance, it can make sense to have an HDHP to save on the monthly premiums. This is exactly why I’ve always opted for an HDHP whenever I have the opportunity.

The second reason to have an HDHP is that it gives you access to a Health Savings Account (HSA). An HSA is a special type of account that you’re allowed to contribute to if you have an HDHP. The money you contribute to an HSA goes in pre-tax, grows tax-free within the HSA, and can be withdrawn tax-free so long as the money is used for “qualified medical expenses.”

The secret with an HSA is that you can invest the money that you contribute and you don’t have to withdraw your contributions for qualified medical expenses at the same time you incur those expenses. That means you can invest your HSA contributions and allow that money to grow over time, then withdraw your qualified medical expenses later tax-free. After age 65, any funds that remain in your HSA and aren’t used for qualified medical expenses can be withdrawn similar to a traditional IRA without any penalty and for any reason (i.e. your funds are contributed pre-tax, grows tax-free, and you pay taxes when you withdraw the money).

The big advantage of an HSA is that it gives you an extra tax-advantaged account (and for most people, taking advantage of all the tax-advantaged accounts you can is ideal). In addition, not only is an HSA tax-advantaged, but it’s also one of the only triple-tax-advantaged accounts out there, where it’s possible to contribute money pre-tax, allow your money to grow tax-free, and withdraw your money tax-free. This is why for many people, having an HDHP and having access to an HSA can be very beneficial.

My HDHP and HSA Situation

Because my wife and I both have our own businesses, we both bear the entire cost of our health insurance. My wife has a “regular” health insurance plan that she gets through her work. This plan includes her and both of our kids. From a health insurance perspective, it makes sense for my wife and our kids to go on her health insurance since they use health insurance a lot more than I do. This is especially true of our kids – it turns out kids are not cheap and they are always getting sick.

Meanwhile, I have an HDHP that I get through the state health insurance exchange. My premiums are lower because of this plan, but I also pay higher deductibles whenever I need to go see a doctor. However, preventative care is still fully covered and I haven’t had to go to the doctor for much else in years, so my healthcare expenses over the past several years have been low. I keep track of all my healthcare expenses and over the past decade, I’ve spent less than $1,000 on healthcare expenses, with the majority of those costs coming from eye exams and buying new eyeglasses.

Importantly, since I have an HDHP, this gives me access to an HSA and allows me to contribute up to the yearly individual HSA limit (this amount changes each year, so you’ll need to search to see what the current limits are). My HDHP is an individual plan that only covers me, so I’m limited to the individual HSA limits, rather than the family limits

So, to recap, my wife and kids are on her “regular” health insurance plan. I have my own HDHP which gives me an HSA that allows me to contribute up to the yearly individual limit.

HSA Expenses Count For Spouses and Dependents

For years, I assumed that since I was the only one with an HDHP, the only qualified medical expenses I could count for my HSA were my personal healthcare expenses. Since I don’t spend much on healthcare, it meant I didn’t have a lot of qualified health expenses that I could use for my HSA.

However, while digging around randomly, I learned that an HSA can be used for qualified medical expenses for spouses and dependents, even if they aren’t on your health insurance plan and don’t have an HDHP of their own. Specifically, the official IRS guidance states the following:

Qualified medical expenses are those incurred by the following persons.

You and your spouse.

All dependents you claim on your tax return.

Source: IRS Publication 969

You’ll notice that there isn’t any requirement that your spouse or dependents (i.e. children) are on your health plan – all that matters is that they are your spouse or a dependent. This came as a big surprise to me but is immensely useful for my purposes. My wife and kids both have much more health expenses than I do and considering my kids have many more years of being dependents and will undoubtedly rack up more medical bills, I’m essentially going to be able to pay for all of that with tax-free money.

One issue is that you need records to back up any withdrawals for qualified medical expenses and I hadn’t been keeping track of their medical expenses over the years. Fortunately, our medical provider keeps track of all payments we’ve ever made, so I was able to dig through all of their records and get everything recorded into a spreadsheet.

In the end, we’re looking at thousands of dollars in qualified medical expenses that I did not previously anticipate.

Final Thoughts – The Best Of Both Worlds?

Looking at it, having an HDHP for myself plus a regular health insurance plan for my wife and kids might give us the best of all worlds. They get a more robust health insurance that covers the higher healthcare costs they typically incur. Meanwhile, I have a lower-cost health insurance that is a better fit for how I use healthcare.

At the same time, having an HDHP means I get access to an HSA, which I can use as an extra retirement account and is one of the few ways to get triple-tax-advantaged savings. And now that I know their health expenses are qualified medical expenses, I’ll be in a position where much of the money I withdraw from my HSA in the future can be withdrawn tax-free.

For those of you looking for an HSA, I recommend Fidelity (here’s a post I wrote about when I switched my HSA over to Fidelity). It’s free and lets you invest in good low-cost index funds, so I can highly recommend it.

Also, your situation may be very different from mine, so be sure to do some research and make sure that an HDHP makes sense for your situation.

This post may contain affiliate links. Financial Panther has partnered with AwardWallet and CardRatings for our coverage of credit card products. Financial Panther, AwardWallet, and CardRatings may receive a commission from card issuers. Some or all of the card offers that appear on the website are from advertisers. Compensation may impact on how and where card products appear on the site. The site does not include all card companies, or all available card offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

More Recommended Ebike/Scooters

Check out these other ebikes and scooters I've reviewed:

Urban Arrow Ebike – Last year, I made one of the largest purchases I’ve ever made – I bought a $9,000 electric cargo bike from Urban Arrow. In my Urban Arrow review, I will discuss what it is and why I decided to buy this bike, as well as discuss how impactful a bike like this can be on your journey to financial independence.
Troxus Explorer Step-Thru Ebike – The Troxus Explorer Step-Thru is a fat-tire ebike that I’ve had the pleasure of riding for a while now. It has amazing power, great looks, and awesome range. If you’re looking for a great fat-tire ebike that offers a lot for the price, the Troxus Explorer Step-Thru is definitely one for you to consider. Check out my Troxus Explorer Step-Thru Review.
Hovsco HovBeta Ebike – The HovBeta is a folding ebike with great specs and a lot of interesting features, and importantly, it’s sold at a good price point. I’ve had a blast commuting with it and using it to do deliveries with DoorDash, Uber Eats, and Grubhub. Check out my Hovsco HovBeta Ebike Review.
Vanpowers Manidae Ebike – The Vanpowers Manidae is a fat tire ebike that I’ve been riding as my primary winter commuting bike and have also been using it to do food delivery with apps like DoorDash, Uber Eats, and Grubhub. After clocking in a decent number of miles with this ebike, I wanted to write a post sharing what my experience with the Vanpowers Manidae ebike has been like. Check out my Vanpowers Manidae Review.
Sohamo S3 Step-Thru Folding EBike Review – A Great Value Folding Ebike – The Sohamo S3 Step-Thru Folding Ebike is an entry-level folding ebike that offers a lot of value for the price point. I’ve been riding the Sohamo S3 for a while now, putting the bike through its paces, and I have to say, this bike has exceeded all of my expectations. Check out my Sohamo Review.
KBO Flip Ebike – The KBO Flip is an excellent bike. I’ve had a great time riding it and think it’s a versatile bike that can be used for a lot of purposes and can fit a variety of lifestyles. It’s worked out great for me as a general commuter bike and as a food delivery bike. Check out my KBO Flip Review.
Hiboy P7 Commuter Ebike – The Hiboy P7 is an excellent electric commuter bike that’s offered at an affordable price point. The range and speed of this bike are both very good, so you won’t have any trouble getting anywhere you need to go with it. As a food delivery vehicle, this is also good – with how much range it offers, you’ll be able to work all day on a single charge. Check out my Hiboy P7 Commuter Electric Bike Review.
Himiway Escape Ebike – The Himiway Escape is an interesting bike for anyone looking for a moped-style ebike. If you’re a gig economy worker, the Himiway Escape is particularly interesting and it’s possible to think of it as an investment, especially if you can opt to do deliveries with the Himiway versus using a car. It’s not cheap, but you can definitely make your money back when you compare the mileage you’ll put on your car versus using an ebike. Check out my Himiway Escape Bike Review.
Espin Sport Ebike – The Espin Sport is a good ebike for someone who is looking for an ebike that feels and rides more like a regular bike. There are many ebikes that are really only bikes in name. In reality, they’re basically electric mopeds. The Espin Sport, by contrast, is a bike you could probably ride without the battery and you’d feel like you’re just riding a regular bike. Check out my Espin Sport Review.
Varla Eagle One Scooter – The Varla Eagle One is an excellent scooter that can make sense for a lot of people. It can work as a primary mode of transportation. You can use it to work on gig economy apps like DoorDash, Uber Eats, and Grubhub. And it can also be a recreational vehicle if you’d prefer to use it for that. Check out my Varla Eagle One Review.
Varla Falcon Scooter – The Varla Falcon is an excellent scooter that offers a good amount of power at a lower price point compared to more powerful scooters. It’s not exactly an entry-level scooter, nor is it a high-powered scooter. I think it fits somewhere in-between those two categories – an intermediate scooter if I had to give it a category. Check out my Varla Falcon Review.
Hiboy S2 Scooter – The Hiboy S2 is an excellent entry-level commuter scooter that's perfect for someone looking to save some money in transportation costs and improve their commute. Check out my Hiboy S2 Review.
Hiboy S2R Scooter – The Hiboy S2R is one of the more interesting electric scooters I’ve been able to test out. It’s not a high-powered scooter, but for an everyday transport option, it’s very useful, especially given some of the unique features that it has. Indeed, for the price, the Hiboy S2R might be the best value scooter I’ve used. Check out my Hiboy S2R Review.
Fucare H3 Scooter – The Fucare H3 is a fun scooter and I’ve enjoyed testing it out. For a daily commuter or quick trips or errands, the Fucare H3 is probably the scooter I’ll use. It’s portable and easy to maneuver, so it’s just easier to take on the road when I need it. Check out my Fucare H3 Scooter Review.

More Recommended Investing App Bonuses

For additional investing app bonuses, be sure to check out the ones below:

M1 Finance ($100) – This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account. Check out my M1 Finance Referral Bonus – Step-By-Step Guide.
SoFi Invest ($25) – SoFi Invest is an easy brokerage account bonus that you can earn with just a few minutes of work. Use my SoFi Invest referral link, fund your SoFi Invest brokerage account with just $10 and you’ll get $25 of free stock. I also have a step-by-step guide for the SoFi Invest referral bonus.
Webull (20 free stock shares) – Webull's current promotion gives you 20 free shares valued between $3-$3,000 each if you open an account using my referral link. Here’s a guide I wrote about how to earn your free shares using Webull.
Moomoo (15 free stocks) – Moomoo is a free investing app currently offering 2 different referral bonuses if you open an account using a referral link. Read my Moomoo referral bonus guide for more information.
Robinhood (1 free stock) – Robinhood gives you a free stock valued between $2.50-$225 if you open an account using my referral link.
Public (1 free stock) - Public gives you a free stock valued between $3-$70 if you open an account using my referral link.

More Recommended Bank Account Bonuses

If you’re looking for more easy bank bonuses, check out the below options. These bonuses are all easy to earn and have no fees or minimum balance requirements to worry about.

Upgrade ($200) – Upgrade is a free checking account that’s currently offering a $200 referral bonus if you open an account and complete a direct deposit. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Here’s a post I wrote with more details: Upgrade $200 Referral Bonus – Step By Step Directions.
Ally Bank ($100) – Of all the banks out there, Ally is, without a doubt, my favorite. At the moment, Ally is offering $100 to customers who open an eligible Ally account and meet the requirements. Here are the step-by-step directions to earn your Ally Bank referral bonus.
Fairwinds Credit Union ($175) – Fairwinds Credit Union is offering a referral bonus for users that sign up using a referral link. Fairwinds has no fees or minimum balance, so this is a particularly easy bonus to earn. Since this is a smaller credit union, my gut instinct tells me this offer won’t be around long, so if you’re in a position to meet the bonus requirements, grab this bonus before it’s gone. Here is my step-by-step guide on how to earn your Fairwinds Credit Union bonus.
Chime ($100) - Chime is a free bank account that offers a referral bonus if you use a referral link and complete a direct deposit of $200 or more. In practice, any ACH transfer into this account triggers the bonus. This bonus is easy to earn and posts instantly, so you’ll know if you met the requirements as soon as you move money into the account. I wrote a step-by-step guide on how to earn your Chime referral bonus that I recommend you check out.
US Bank Business ($900) – This is a fairly easy bank bonus to earn, since there are no direct deposit requirements. In addition, you can open the Silver Business Checking account, which comes with no monthly fees. Check out how to earn this big bonus here.
GO2Bank ($50) - GO2Bank is an easy bank bonus that I recommend people take advantage of if they have an easy way of meeting the direct deposit requirement. I like that it’s easy to open the account and that the bonus pays out quickly. Check out my step-by-step guide on how to earn your GO2Bank $50 referral bonus.
Current ($50) – Current is a free fintech bank that’s offering new users a $50 referral bonus after signing up for an account using a referral link. Current is an easy bonus to earn and also gives you access to three savings accounts that pay you 4% interest on up to $2,000. That means you can put away up to $6,000 earning 4% interest. That’s very good and makes Current an account I recommend to everyone. Check out my step-by-step guide on how to earn your Current Bank bonus.
Novo Bank ($40) - Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. In addition to being a good bank bonus, Novo is also a good business checking account. It has no monthly fees or minimum balance requirements and operates a good app and website. Indeed, it’s the business checking account I currently use for this blog. Check out my post on how to easily open a Novo account.
Varo ($25) – Varo is a free fintech banking app similar to Chime or Current. It’s currently offering a $25 bonus to new users that open a new Varo account with a referral link. The bonus for this bank is very easy to meet, all you need to do is spend $20 within 30 days of opening your Varo account. Check out my step-by-step guide to learn how to earn this bonus.

Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.

Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.

Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:

SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $300 if you complete a direct deposit.
5% Savings Accounts. I'm currently getting 5.24% interest on my savings through a company called Raisin. Opening a Raisin account takes minutes to complete, it's free, and all of your funds are FDIC-insured. I explain how it works, why I'm now using it to store my emergency fund and any other cash savings I have, and why I recommend everyone check it out in this review.
US Bank Business. US Bank is currently offering new business customers a $900 signup bonus after opening a new account and meeting certain requirements.
M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account.
Empower. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.

Feel free to send Kevin a message here.