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Expert Insurance Advisors for Individuals and Groups |
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Health Savings Accounts Health Savings Accounts are health plans that combine a high deductible health plan (HDHP) with a tax free savings account. A high deductible insurance plan is less expensive than a low deductible plan. The idea is that you would put the monthly premium savings into a tax-free savings account and use the money to pay for medical expenses not covered until your deductible is met. Health Savings Accounts replaced another solution called a Medical Savings Account when they were passed into law as part of the 2004 Medicare reform bill. |
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are established with a financial institution and enable employees to use the accumulated fund to help pay health plan deductible expenses | |
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include money contributed by you and/or your employer | |
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funded with pre-tax dollars and accumulate interest tax-free | |
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do not include the use-it or loose-it personality of the FSA account | |
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can be used, after age 65, to pay for non-medical expenses | |
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are available when coupled with high deductible health plans subject to guidelines below | |
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HSAs cannot be used to pay the medical premiums unless you are on COBRA. | |
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HSAs can be used to pay Long Term Care insurance premiums. |
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EXAMPLE - Family - 37 year old couple with two children coverage including RX: $500/$1000 deductible plan with 80/20 co-pay: $520 $2000/4000 deductible plan with 80/20 co-pay after deductible: $346 Monthly Savings: $174 Annual Savings: $2,088 These plans are not for everyone, but if you can afford the extra risk you could realize up to a $2,087.76 savings each year. If you put $1,500 of the savings into your HSA, you will have the extra risk covered with less out of pocket. The guidelines for what you can spend your money on are broad. The IRS will likely come out with a document that replaces the MSA terminology with HSA terminology, but the allowable expenses will likely be very similar. |
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We recommend HSA's to anyone who can afford the risk of a high-deductible plan and who has the discipline to save some of their premium if they need to pay their deductible.
For more information on the HSA, and when we think it's best suited, contact us! To see how to set up an HSA, see How to set up an HSA.
For more information on the Health Savings Account, click here HEALTH SAVINGS ACCOUNT FREQUENTLY ASKED QUESTIONS.
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Expert Insurance Solutions 1730 Akron, Peninsula Rd., Suite 4 Akron, OH 44313 330.923.0258 * 888.496.7162 Expert Insurance Solutions provides this web site for informational purposes only. For a personal health care proposal, please contact us at Info@eeis.biz. |