As an alternative to traditional health insurance plans, many individuals and business owners are turning to HSA’s for their health coverage – saving huge amounts on their medical premiums.
HSA’s have 2 parts: the HSA health insurance policy and the HSA bank account
1) The HSA health insurance policy is a very simple policy. It covers 80% of your medical expenses AFTER you’ve met your deductible. HSA plan deductibles are high – normally around $2000. Unlike traditional health insurance, there are no co-pays for doctor visits. ALL medical expenses (except an annual physical) are subject to the deductible – even doctor visits. By cutting out the “upfront benefits” most traditional health insurance plans offer, HSA insurance premiums are drastically lower.
2) The HSA bank account can be opened at your local bank or credit union. Any deposits you make to your HSA bank account are tax deductible, just like contributions to an IRA or 401k plan. The IRS allows you to deduct up to $3050 as an individual, or $6150 as a family for HSA contributions you make in 2010. *the best part is – you can pay for your medical, vision and dental expenses with your HSA savings (effectively using tax-free money). Your bank will give you a debit card and/or checks to use.
1) HSA accounts are NOT “use-it-or-lose-it” accounts like FSA (flexible spending accounts) that many employers offer. Any HSA dollars you don’t spend this year, will roll over to next year, and will continue to grow tax-deferred, just like an IRA or 401k. Many people use their HSA account as a retirement plan that they can make tax and penalty free withdrawals from when they have medical expenses.
2) You can NOT open an HSA bank account unless you have an HSA health insurance plan. HSA insurance policies always have the letters “HSA” in the policy name.
3) Individual HSA plans do not cover Rx Prescriptions or Maternity. Group HSA plans (employer sponsored plans) do cover Rx Prescriptions and Maternity (after the deductible has been met)
To find out if an HSA plan is right for you, give us a call at 360-464-1622 or visit us at www.wahealthagency.com