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Health Savings Accounts - HSAs “HSAs will provide more Americans with the Healthcare they Deserve at a Price they can Afford!” President George W. Bush Health Savings Accounts, or HSAs, were created as part of the Medicare Reform Act of 2003 and provide consumers a tax-exempt vehicle in which funds accumulate to pay small medical expenses coupled with a high-deductible insurance plan to protect against major medical expenses. These plans were created in response to the rising cost of health care with the intent to give the consumer back the control of their health care costs and in many cases reduce premiums by 30-40% or more on an annual basis.
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- or - Click here for immediate Assistance from Licensed Agent Is a Health Savings Account (HSA) Right for Me
There are two parts to the HSA concept. Before a health savings account can be opened, a qualified High Deductible Health Plan (HDHP) must be in place to cover the individual or family. An HDHP provides health coverage for an individual or family with an affordable premium. The guidelines for an HDHP are determined by the Internal Revenue Service each year. To determine if your plan qualifies, please contact your health plan representative. The current requirements of an HDHP are as follows: Below are the official minimum deductibles, maximum contribution amounts, and maximum out-of-pocket limits for 2007. How Does a HSA Work?When an HSA is combined with a higher deductible, HSA qualified health plan (required) then the HSA and the insurance policy is meant to replace a much higher cost, more restrictive, traditional health insurance plan. Traditional health plans with co-pays are typically 30 to 70% higher in cost, more restrictive to use than an HSA and still leave you with out of pocket expenses most people don't expect to pay. What are my Deductible Options?
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Comparison |
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Question |
HRA |
FSA |
HSA |
Do the funds belong to the employee? |
NO |
YES |
YES |
Can the money be invested and the employees earn interest? |
NO |
NO |
YES |
Can the employees use the funds for things other than medical expenses? |
NO |
NO |
YES |
Can the employee take the money with them if they switch employers? |
NO |
NO |
YES |
Do the funds rollover year-to-year? |
Generally, NO |
NO |
YES |
Who can contribute to the account? |
Employers |
Employee |
Employer, Employee |
Contributions are 100% tax deductible on your federal tax return in 2007. What is not used in the account each year stays in the account and continues to accumulate interest on a tax-favored basis to supplement retirement just like a traditional IRA, but itýs a Medical IRA... These tax deductions are in addition to any IRA's you currently have and will not affect those plans in any way. Except of course, to lower your tax bill.
Tax free dollars can be used to virtually pay for all other medical expenses typically not covered under traditional types of health plans like dental, eyeglasses, contact lenses, lasik eye surgery and much more. If you are unemployed or laid off and are collecting State or Federal unemployment insurance, then you can use funds from your Health Savings Account to pay for your health insurance premiums and for your routine health expenses -- All TAX-FREE!
The many other benefits of HSAs will be outlined in detail when we meet for an appointment either by phone, live web cast or in person.
We understand HSAs. We know how to set them up for simplicity. We know how to explain them to our clients.
Please contact us at 877-749-2241 with questions.
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or
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