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| Health Savings Accounts (HSAs) |
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As of January 1, 2004, the MSA is now known as the HSA. These plans are no longer just for the self-employed. Take control of your health care expenses with a tax-favored savings account and quality major medical coverage. Everybody without other health insurance now qualifies for these plans.
2009 Health Savings Account Limits / (2009 HSA Contribution Amounts)
Individual - $3000 (up from $2900 in 2008)
Family -- $5950 (up from $5800 in 2008)
Catch-up provision for people 55 and older is $1000 for 2009 up from $900 in 2008.
The most significant change recently is the amount you contribute to the HSA account is no longer limited by the deductible you choose. You can have a $1200 deductible as an individual and contribute the full $2900 and you can do this regardless of when during the year you open the account. To read more about contribution limits and the HSA plans click here to read the US Treasury Guidelines.
We strongly recommend starting your search for an HSA-qualified health plan by state (below) because you will get guidance and see only plans that are available in your area (no sense in looking at something that's not available in your state). Unlike big e-insurers that only give you the quote and a customer service representative to talk to, here you'll talk to someone that is a seasoned veteran in the industry. You'll also receive service unlike anywhere else. Our price is the same as the big companies, but you receive boutique service. Because, after all, buying insurance is so much more than just getting a quote.
These plans, although not understood by many consumers or agents, are really very simple. The plan is just separated into two parts – the high deductible major medical plan and the tax-favored savings account.
The high deductible plan covers eligible health care expenses after a “high deductible.” The deductibles differ with each insurance company but are generally $1,000 and higher for individuals and $2,000 and higher for multiple insureds (parent/child, husband/wife, or family). Prescriptions are covered via the deductible and you usually won’t find co-pays for office visits with this type of plan either. Also, the plan needs to be eligible for an HSA account – not all high deductible policies qualify as an HSA as some think. We’ll help you get the right health plan so you can get the tax deduction. For the self-employed, the insurance part of the plan is still tax deductible as any plan would be for them.
The second part of the plan is the savings account (see list below), which does not need to be done with the insurance company, and it can pay for the eligible medical expenses before the health plan kicks in (after the annual deductible). The big advantage to the HSA is that all eligible deposits are 100% tax-deductible and withdrawals are tax-free when used to cover eligible health expenses. Also, this is NOT a “use it or lose it plan.” This is a “use it or use it next year or use it eventually for retirement” plan. How much does your current health plan pay towards your retirement? The penalties for non-medical withdrawals are similar to the rules for early withdrawal from an IRA.
Another advantage is that you can use the savings account to pay for things not covered by the health plan, such as dental insurance and expenses, over the counter drugs, and vision services and expenses (glasses, contacts, exam...even laser eye surgery). Although these expenses don’t count towards your deductible, the savings in taxes is still attractive. The higher your tax-bracket, the more attractive these plans are.
If you or your spouse need maternity coverage these plans may not be the best route to travel depending on the state you live in. If maternity is required (by you) and not available on the HSA plan, consider another plan for the person needing the maternity coverage – the rest of the family could then apply for the HSA. OR, consider paying for the maternity out of pocket as sometimes the cost to add a maternity benefit is about the same as the benefit that could be received back. Your best bet if you need maternity coverage is to contact us to help you out.
Should you later get a job that provides health benefits you can still use the funds in the savings account to pay those future copays and and deductibles. It's just that you won't be able to add new funds to the account (unless the new plan is a qualified high-deductible plan). So, even if you know you're only going to hold the account for a short period it can still be quite beneficial.
Health Savings Accounts Administrators (HSA Accounts)
We like FirstHSA and HSABank as the savings vehicles for HSA plans. Both are low cost with many benefits and competitive rates. We also have a plan we offer to our HSA health clients. It's a NO-FEE HSA account from First American Bank. But, you can feel free to use any savings plan you'd like, even if you do just the insurance part with us. Below is a list of accounts and links to sites and forms (where available). If you know of others please let us know about them so we can improve this list. Please note that plans are subject to change and we don't endorse any plan....we're just providing you information.
* Time has 3 options for clients from no frills/no fee to lots of frills/some fee
**GoldenRule's is available only through GoldenRule and you can get details when you get a quote from our site.
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View Our Online HSA Presentation presented by one of our many carriers...Time Insurance.