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Health Savings Accounts (HSA) work in conjunction with a High Deductible Health Plan to allow you to save more money on your health care dollar. The savings that you will get from your premium for a High Deductible Health Plan (HDHP) can be placed into your health savings account tax free. If you don't use the money in the HSA, you get to keep the money instead of using it to pay high premiums for traditional health insurance. Every major health insurance carrier offers HSA qualified High Deductible Health Plans. To view HSA quotations CLICK HERE or call 704-746-6184 to discuss your needs and obtain a quotation. (Again, we emphasize, if you have questions, please call us to discuss them).
Health Savings Accounts were designed by an act of Congress to help consumers save money on health care costs. These accounts are tax free savings accounts intended for health and medical expenses. Otherwise known as consumer driven health care, the US congress established the Health Savings Account system in an attempt to control the rising cost of health care in the United States.
The High Deductible Health Plan is full insurance coverage, but it does not have any copayments. Everything is first subject to a deductible and then is insured at a coinsurance rate (usually 100%). Since you know your out of pocket maximum for health care in a given year, you can place the out of pocket maximum for you and your family's HDHP into your Health Savings Account and know that you will be covered in the event that a medical necessity should arise. Premiums for HDHP's can be as much as 40% less than that of a regular PPO plan with copayments. Those savings are making many people consider switching to Health Savings Accounts.
Before you get an HSA, you must first have your HDHP in place. The money you contribute to your HSA is tax-deductible. Contributions can be made each year up to the amount of the major medical policy's annual deductible, with a cap of $2,600 for individuals and $5,150 for families. Individuals over age 55 can make extra contributions to their accounts ($500 in 2004, increasing to $1000 by 2009) and still enjoy the same tax advantages. Money from the HSA can be withdrawn tax-free when used to pay routine medical bills, like doctor visits or medicines. The money can also be saved in the account and carried over into the next year, earning interest tax-free.
You own and control the HSA and keep it whether you change jobs or move. You can spend money from your HSA on the doctor or pharmacy of your choice. You and your doctor determine which medical goods and services you need, without interference from an insurance company. With HSAs, less of your money goes to insurance companies and more money stays with you and your family. Again, money from the Health Savings Account can be used to pay medical bills below the insurance policy's deductible. It can also be used to pay for expenses that insurance does not cover, like contact lenses, over-the-counter medicines, or braces for your children.
Most individuals and families have few medical bills during some years and higher expenses in others. During years when your health care spending is low, you can leave the money in your HSA - where it will earn tax-free interest and be available in years when unexpected medical expenses arise.
The major medical insurance policy protects you against big medical expenses, like hospital stays, and provides peace of mind by limiting total out-of-pocket medical costs in the event of serious illness. |
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