HSA
More then 6 million Americans now have an HSA. The Treasury department estimates by 2010, that number will swell to 25 - 30 million. So is an HSA right for you. Let’s take a look.
HSA stands for Health Savings Account, and it’s a smart and easy tool for consumers, like you, to use to save healthcare expenses for you and your family. An HSA is a tool
alongside your health plan. So, why an HSA plan?
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More affordable health insurance.
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Greater control over your healthcare expenses.
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Triple Tax advantages.
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Retirement Healthcare Savings.
Traditional health plans can be quite complicated to understand. Although HSA concepts are suprisingly simple. Basically an HSA is a bank account with special features. Your HSA belongs entirely to you. And, you and or your employer can contribute to your HSA to save for future Healthcare expenses.
Now for the “Special Features” part, this is where it gets good!
Any money contributed to an HSA is Tax Deductible on your annual tax filing. The money grows Tax Deferred (which means the earnings are NOT TAXED), and can be invested in securities like Stocks, Bonds and Mutual Funds. And as long as your HSA money is used for eligible medical expenses, you’ll never be charges income tax on that money. This Tax Benefit can save you between 25% to 40% on every dollar you contribute, depending on your personal tax bracket.
Just like a regular bank account the unused money in the HSA account rolls over from year to year, so you can build your savings to cover future medical expenses. You’ll never lose unspent money. And since the HSA is yours, it is completely portable, which means you take it with you even if you change employers.
Savings for Treatment?
I see no advantage to paying current medical expenses with “after tax” money, whan you have a “tax favored” HSA in use.
Here’s an example:
A $1,000 claim paid with “after tax” dollare requires you to earn $1,333, pay $333 in taxes, to have $1,000 left over to pay the claim. Same claim paid from the HSA costs you $1,000.
HSA Eligible Medical Expenses:
The List is large, and remember these expenses are TAX FREE!
Your HSA can cover your Spouse & Dependents.
Even if you have a “Self - Only” plan your HSA money can be used for your spouse and dependents.
HSA’s at age 65.
Health Savings Accounts are designed to help you put Managed care health plans create “networks” of doctors, hospitals, and other health care providers. Plan members have the most insurance coverage if they receive care from providers in the network. The most common managed care plans are: Preferred Provider Organizations (PPOs), Health Maintenance Organizations (HMOs), and Point of Service (POS) plans.
A health plan network consists of all the doctors, physicians, hospitals, clinics, and specialists that agree with an insurance company to charge discounted prices for their services — in exchange for patient referrals.
Annual HSA Contributions:
2009:
Individual = $3,000
Family = $5,950
2010:
Individual = $3,050
Family = $6,150
How do I know what is covered under my plan?
Insurance companies will provide a detailed description of which health care services are covered — and any care that’s excluded or has limited coverage. Ask your agent if you have any questions about your coverage.
What is a premium?
The premium is the monthly payment you make to the insurance company to keep a policy in effect.
What is a deductible?
The deductible is the portion of your medical bills per year you must pay before the insurance coverage begins. For example, if you have a deductible of $500, once you pay $500 of your medical bills, your insurance will start covering any remaining health care costs for that year.
What are copayments and coinsurance?
A copayment is the dollar amount of a single medical bill you must pay to receive care. For example, to go to the doctor for a routine check-up, a copayment for the visit may be $30 for the visit. Your insurance will pick up the rest of the bill.
Coinsurance is very similar, but it’s expressed as a percentage. For example, an 80/20 coinsurance rate means you pay 20% of the bill and insurance covers 80%.
What is an out-of-pocket maximum?
This is the maximum amount of money per year you’ll have to pay out of your own pocket for health care. Once you reach the out-of-pocket max, most insurance plans will cover the rest.
What is a drug formulary?
This is the list of all the prescription drugs that are covered under an insurance plan.
Can I get health insurance if I smoke?
You can find health insurance if you smoke, but your plan will most likely be more expensive than non-smokers. Consider kicking the habit to save money. Many plans require you to be smoke-free for a year to get non-smoker rates.
What is a pre-existing condition?
Any health condition or illness that you had before your insurance coverage begins can be considered a pre-existing condition.
Are Medical Discount Plans the same thing as insurance?
No. They provide discounts for medical services, but they do not offer the same type of protection. Everyone is accepted to enroll in a medical discount plan regardless of health history or pre-existing conditions.
Feel free to contact me anytime with your questions.
John Conner
800-700-1246
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