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| HSA (Health Savings Account) |
Compliments of Golden Rule Insurance Company |
Health Savings Accounts (HSA) help you take control of your health care expenses with a tax-favored savings account and comprehensive medical coverage. We connect you to only the companies that have the most experience with Health Savings Accounts. HSAs were pioneered first as tax favored, then known as Medical Savings Accounts, offered to the public in 1997.
The U.S. Congress rencently passed legislation which made paying medical expenses more affordable for consumers. Effective January 1, 2004, the new law provides broad acess to Health Savings Accounts, which allow individual consumers as well as business owners to pay for qualified medical expenses with pre-tax dollars (income tax free) and save for retirment on a tax deferred basis.
| What's a Health Savings Account? |
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An HSA combines high deductible health insurance with a tax-favored savings account. Money in the savings account helps pay the deductible. Once the deductible is met, the insurance starts paying. Money left in the savings account earns interest and is yours to keep.
Why High Deductible Health Insurance?
To get the benefits of an HSA, the law requires that the savings account be combined with high deductible health insurance. High deductible health insurance costs less than traditional $250 or $500 deductible coverage, because the insurance company doesn't have to process and pay claims for routine, low-dollar medical care. |
HSAs typically cost less than traditional plans.
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| How does a Health Savings Account work? |
- You obtain coverage under a qualified health insurance plan with a minimum deductible of $1,000 for singles and $2,000 for families.
- Each year you're allowed to save 100 percent of the health plans annual deductible, up to $2,850 for singles and $5,650 for families in 2007, regardless of your deductible. Older Americans can save even more by making "catch-up contributions."
- Pre-tax money is deposited each year into an HSA and can be easily withdrawn at any time with no penalty or taxes to pay for qualified medical expenses. Withdrawals can also be made for non-medical purposes, but will be taxed as normal income and are subject to a 10 percent penalty if done prior to age 65.
- You use the savings account to pay for your lower-dollar medical expenses, or those that aren't covered by the health plan.
- Any HSA Funds not used each year remain in your account, and earn interest tax free to supplement medical expenses at any time in the future.
- Once you meet the deductible, the health insurance covers your medical expenses as defined in the policy.
- Similar to an IRA, the account belongs to you, not an employer. Although your employer can not contribute to your IRA, your employer can contribute to your HSA.
| What are the benefits of a Health Savings Account? | HSAs make quality coverage simple.
- Coinsurance is 100% after the deductible is met (optional 80% coinsurance is available to lower premium amount).
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- Savings can be used to help pay the deductible and for noncovered medical expenses, such as dental and vision.
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- One deductible per family.
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- Savings reduce or eliminate annual out-of-pocket exposure.
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| Comprehensive: |
Pool of Money: |
- Quality medical, including adult preventive care and prescription drugs.
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- Savings not spent remain in the HSA tax deferred.
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Tax Deductible |
Tax Deferred |
- Contributions to the HSA are 100% deductible just like an IRA. (see company's brochure for legal limit.)
- Tax favored
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- Interest earnings accumulate tax-deferred, and if used for qualified medical expenses, are
tax-free.
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