HSA health insurance deals were created in 2003 to help consumers take control over their medical treatment and expenses, and reward them for being frugal and managing their funds wisely. And physicians and hospitals would also lower costs since they were now in competition for budget-minded patients. It has worked very well with more than a million personal accounts opened in the last 10 years.
These types of plans are offered by top insurers such as Aetna, UnitedHealthCare, Humana, Cigna and many of the Blue Cross Blue Shield companies. Typically, Health Savings Accounts rates are substantially lower than most medical plans and provide a great alternative to traditional coverage. If major medical protection is your priority, and office visits and prescriptions are rarely used, this type of plan could potentially save thousands of dollars in premiums. We quote coverage at the lowest costs published by each carrier and we’ll help you find the lowest prices in your area.
By utilizing the “Get Free Quotes” button at the top of the page, you will be able to easily view your options.
What Is An HSA?
It is an inexpensive medical policy that becomes your health care. It is an account that allows you to pay for your expenses and also save money for anticipated future qualified medical, dental and vision expenses on a tax-free basis. “A High Deductible Health Plan” (HDHP) works with an HSA and provides the major medical protection. Since an HDHP typically costs less than a standard plan, the savings can be deposited into the Health Savings Account and accessed at any time.
But you do NOT have to set up the account since it is optional. However, if you choose to open one up, check with your local bank or credit union first, since they may waive any small setup fee or monthly maintenance charge.
What Are Some Features Of An HSA?
An HSA allows you to reduce your federal income tax by depositing funds into an account that you own. As mentioned, typically, a bank of your choice is used and the current maximum contribution is $3,100 for individuals and $6,250 for families. You do have to use the money for “qualified” expenses to qualify for the tax deduction.
Also, preventive benefits are not subject to a deductible on the insurance portion. So although you would present your ID card at the time of treatment for a routine annual checkup, your provider will be reimbursed 100% and thus, no bill will be sent to you.
And other expenses will often receive a “negotiated network repricing” that can substantially reduce your out of pocket costs. This reduction can be as much as 50% or more, especially on laboratory tests or X-rays. Office visits tend to receive a smaller discount of approximately 10%-25%. You can also get some favorable deals with banks when you use them for setting up the separate account. And often, membership fee reductions from health spas and exercise establishments are made available.
How Will National Healthcare Reform Affect An HSA?
In March of 2010, Congress spared the tax break that HSAs offer. Legislation, in fact, may make them more popular than ever, especially if you are eligible for little or no tax subsidy from the government. HSAs have been in existence since 2003 and are very popular. One minor change is that over-the-counter medicines are no longer a qualified expense that can be paid from your HSA.
It is assumed that HSA qualified plans will continue for many more years. And of course, there is much debate in Congress regarding the future of “The Affordable Care Act.” There is a possibility that Exchanges will not be implemented in 2014, as expected. The Supreme Court ruling in June of 2012 did not change the future of HSAs and it appears that most plans will remain in place. We don’t expect future legislation to challenge the legality of the Exchanges and required mandates.
Can You Have An HSA Without Having An HDHP In Your Own Name?
Yes. As long as you are covered under an HDHP, you can become eligible. Of course, you would have to meet the other requirements. It is very common to have an HSA while your HDHP is in your wife or husband’s name. And of course, your dependents can be included on the policy. There is no specific advantage in putting them on separate policies, since it may lead to a slightly higher premium. When the children leave the contract, they can take out their own plan.
What Are The Maximum Allowed Contributions ?
The maximum contribution for 2013 is $3,250 for an individual and $6,450 for a family. These amounts were increased from 2012. The annual maximum contribution changes at the beginning of every year based on the Consumer Price Index (CPI). An additional contribution of $1,000 can be made by anyone that turns 55 before the end of the year.
Is An HSA The Same As A Flexible Spending Account (FSA)?
There are similarities. Both contracts allow you to pay for qualified medical expenses with your pre-tax dollars. However, with an FSA account, any money in the account unspent at the end of the year is gone. With your HSA, you don’t lose the money if you don’t spend it and you can withdraw funds at any time. And if you need money fast, you can write a check for the amount that you need.
Are You Allowed To Have Multiple Accounts?
You are allowed to have more than one HSA and you may also contribute into many accounts. However, your maximum contribution limit does not change and there are no tax advantages to having multiple accounts. In fact, in most situations, it’s better to stick with one contract.
What Happens When You Become Eligible For Medicare?
Once someone is enrolled in Medicare, they can not contribute into an HSA. However, any unused funds may be used to pay for qualified medical expenses that are not covered under Medicare or a Medicare Supplement policy. And if you have built up thousands of dollars in the account, it may last quite a while! Also, if you haven’t reached age 65 yet and need temporary medical coverage to get you there, gap information can be found on this page.