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Health Savings Accounts: They Aren?t for Everyone?but May be for Many of You

By Health Care Info | July 21, 2010



January marks the five-year anniversary of the health savings account (HSA pass) legislation. I still remember with such excitement and expectation that the first conversation with one of our customers. The HSA would change the face of social and health care. I was prepared to champion the cause. Let’s get some things straight before I go into the mechanics: 1 HSA is not the health insurance: they are accounts that you pay in cash for health costs. They work very similar to IRA. 2nd You must have a high deductible health plan (HDHP) to qualify for an HSA. 3rd The deductible of your HDHP, you should coincide with your HSA. 4th What is your traditional health insurance comparison (HMO’s, POS’s, PPO’s), plans HDHP tie all of your benefits under a single deductible. Yes, many abbreviations and room for confusion. Bottom line: – HDHP plans are for the insured, which are prior to any deductible insurance benefits o This is the driving force behind HDHP plans generally potentially far less expensive that paid are designed in traditional designs Plan – All services, preventive, wellness, recipes, in / out patients, hospital stay are all covered under one deductible. – The insured money used in the HSA account to pay for the services needed o money from either the insured or employer may be contributing to o If money is not used in HSA, it rolls over to the following calendar year 2009 O contribution limits are $ 3,000 allow for individuals and $ 5,950 for families – Plan Designs 100% coverage once a deductible is satisfied. I have an HSA plan, and we have several customers with them. , I can not say that it is a good fit for all. However, I encourage any individual or small business to explore the possibility. Why is this concept so much sense for so many people? HSA plans do not want to pay the insurance companies a lot of money until the deductible is reached. It is this factor that reduces the contributions to health insurance. It can happen that you rarely go to the doctor. Most people want to properly protect against catastrophic loss? Why pay exorbitant premiums for coverage you do not use them? Here’s a quick example to my point: current situation: – John & Suzy Q Public have a traditional PPO plan illustrate Insurance Company with X – deductible is $ 2000 for each of them and go to the doctor $ 40 – premium for their insurance $ 700/month – John has not been to the doctor, but twice in the last 4 years and Suzy go once a year – you are spending $ 8400/year o This does not apply for costs of doctor visits / checkups HSA Solution – John and Suzy HDHP PPO plan with a switch Y Insurance Company – The deductible for each is $ 2,500 (for a total of $ 5000) – Premium for the HSA plan is $ 450/month – John and Suzy take the $ 250/month savings in and set that against their HSA account each month – now they are spending $ 5.400 in premium and save $ 3,000 in their HSA account if they o to be healthy, very little further savings of $ 3,000 o What money they save, rolls over the following year may be required. It is time to explore the possibilities with an HSA. Talk with your financial professional or the Human Resources Director at your employer. Depending on the situation, this is a great way to save money and make a wise consumer health insurance. Each result in an HSA grow tax deferred. Payments for medical expenses that need to be qualified to use as per IRS definitions, are not subject to income tax. If funds are withdrawn for other reasons, all taxes and distribution before age 59 ½ may be subject to a 10% tax penalty.

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