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Year 2004-2005

Health Savings Accounts (HSAs) – An Employee’s Perspective

Health Savings Accounts (HSAs) – Why do I care?

Health Savings Accounts (HSAs) – What does it mean to me?

Health Care Costs Soar!
Prescription Prices Drive Consumers to Canada!

HMO Sued By Husband!
Managed Care Determines Treatment – Not The Doctor!

These headlines scream out everyday. These are troubled times for the health industry. But these are even scarier times for you – the health industry consumer. Your health insurance keeps going up with less coverage. Your prescriptions are increasing in price with less coverage by your insurance.  Concerned? Keep reading.

OK – So what is it?

On January 1, 2004, congress passed a new option, approved by the IRS, called Healthcare Savings Accounts (HSA) .  Also called other phrases including health spending account or healthcare spending account.  It became available to help defray some of the rising costs of health care on a tax savings initiative. It is to healthcare what the IRA is to retirement. It provides you with the opportunity to put tax-free money into a savings account use it to pay for medical expenses not covered by your insurance: more importantly pay for deductibles, doctor office copays, prescription copays or basically anything that you share in medical and dental payments. 

Let’s get a little specific here; you create a bank account in an IRS approved format. You have an estimated amount deposited directly into that account via payroll deduction before any taxes come out such as federal, state and Medicare  You can change that amount of deposit at any time.  When a bill occurs, you send us the claim, we process the claim and email you an account explanation and show you what you should pay with your HAS account!

The best part of this new account is you don’t have to spend it all by the end of the year like you did with a flexible spending account offered by your employer. The remainder rolls over every year and, as long as you manage your healthcare expenses carefully, it keeps growing, still tax-free! 

The other best thing is your Healthcare Spending Account is portable. You own it just like an IRA and take it with you when you change jobs. It just follows you – growing from contributions and compounding interest.

Do I qualify?

To qualify you must have a high deductible health insurance plan. For individuals this means at least a $1000 deductible and for families at least a $2000 deductible. You can contribute as much as the deductible on your plan or $2000 if you’re an individual or $5150 for families, whichever is less.

Wait a minute – why do I want to risk a high deductible?

What do you mean risk? High deductible policies are much cheaper than full coverage – usually between 20-40%. If you use that savings to contribute to your HSA to cover the difference between deductibles, you haven’t risked a thing! In fact, if you’re healthy, you should have money left in the account. This money rolls over and you start to build the account up without spending any more money than with your old low deductible coverage. Remember your contributions are tax-free like an IRA. The only difference being that when you withdraw Healthcare Savings Account money and use it for medical expenses – it remains tax-free.

While this new program is revolutionary, it may or may not make sense for you depending on your circumstances. We at www.BenefitsManager.net  are ready to clarify any questions, understand you needs, and provide you with the necessary analysis to see if an HSA it is right for you. Click below to get more information on this exciting, new option.

HSA Questions Answered Here!  

We are just an e-mail or phone call away to help you, our valued client.