HSA Health Insurance Deals – Advantages Of Health Savings Accounts

Health Savings Accounts  help consumers take control over their medical treatment and expenses, and reward them for being frugal and managing their funds wisely. Physicians and hospitals also lower costs since they are 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. Future legislation should continue to provide added tax incentives and credits for both high and low-income households. Although the Affordable Care Act may be tweaked or changed, HSAs will continue to be offered, and will feature more robust coverage. Wellness credits and additional tax incentives may be offered by 2019.

These types of plans are available through top insurers such as Aetna, UnitedHealthCare, Humana, Kaiser, Cigna and many of the Blue Cross Blue Shield companies.  Typically, Health Savings Accounts rates feature substantially lower pricing than most medical plans, and provide a great alternative to traditional coverage. If major medical protection is your priority, and non-preventive office visits and prescriptions are rarely used, this type of plan could potentially save thousands of dollars in premiums. Carriers negotiate large network discounts that are passed along to you. Note: If you are claimed as a dependent by another person, you are not eligible.

 

View And Compare Best HSA Options

We quote  coverage at the lowest costs published by each carrier and we also help you find the best prices in your area. In most states, you can purchase these types of policies “on” and “off” the Marketplace. If your household income qualifies for a federal subsidy, an “on-Exchange” plan would be appropriate. If you can not qualify for government financial aid, them an “off-Exchange” contract may be more suitable. Both high-income and lower-income households can benefits from an HSA. The longer you stay healthy and avoid major claims, the more money you can potentially save on a tax-deferred basis.

By utilizing the “Get Free Quotes” button at the top of the page, you will be able to easily view your options. Both high and low deductible options can be compared, along with various coinsurance options (0%, 10%, 20% and 30% are the most common). Although the deductible should always be considered, the maximum out-of-pocket expenses and availability of network providers in your area also should be reviewed. It’s also important to ensure that you enroll in an HDHP contract, before creating the “savings” account. If you accidentally enroll in the wrong type of account, deposits may not be allowed until the correct plan is active.

 

What Is An HSA?

It is an inexpensive medical policy that becomes your healthcare. 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. Withdraws and deposits can be made online, via telephone, or through mail. Since deposits are pre-tax, your taxable income can reduce, as it does for an employer-sponsored 401k, or a traditional IRA.

Cheap Medical Plans

HSAs Will Save You Money

But you do NOT have to set up the account since it is optional. However, if you choose to start an account, check with your local bank or credit union first, since they may waive any small setup fee or monthly maintenance charge. Many large national banks (such as Chase) make it easy to open up an account online. If you agree to receive all correspondence online (instead of by mail), most or all fees are waived. Otherwise, the monthly maintenance fee will be about $3.

These accounts are FDIC-insured, although many investment options are not, including mutual funds. Deposits can be made electronically, and payments for qualified medical, dental, and vision expenses can also be electronically transferred. Several popular account options are HealthEquity, Optum, Bank Of America, HSA Authority, and BenefitWallet.

Occasionally, a plan may not meet eligibility guidelines by offering excess benefits. For example, prior to the deductible, non-preventative prescription drugs, ER benefits, and office visit (pcp or specialist) coverage can not be offered with a copay. Also, if out-of-pocket maximums exceed IRS guidelines, the plan is not considered qualified. IRS HSA guides and publications are available, and are updated each year.

 

What Are Some Features Of An HSA Including Maximum Contribution Limits?

An HSA allows you to reduce your federal income tax by depositing funds into an account that you own. As previously mentioned, typically, a bank of your choice is used, and the current maximum contribution for 2018  is $3,450 for individuals and $6,900 for families.  Each year, the amount can increase. 2017 maximums were $50 lower. You do have to use the money for “qualified”  expenses to be able to declare the tax deduction. Funds spent on non-medical, dental, or vision expenses will be disallowed for the deduction. Costs of non-prescribed drugs and vitamins also can not be deducted.

The minimum deductible allowed is  $1,350 for an individual and $2,700 for a family. Maximum out-of-pocket expenses are capped at $6,650 (individual) and $13,300 (family). There is a $1,000 “catch-up” contribution allowed if you are 55 or older. If both spouses have reached age 55, a total of $2,000 can be used, if two separate accounts are active. The $1,000 amount typically does not increase each year since it is not attached to any inflationary indexes.

Any use of non-medical expenses inside the contract can result in a 20% penalty. The “catch-up” is highly recommended for upper-income households that are not able to utilize other available deductions. Changes to the catch-up amount must be approved by legislation since annual increases are not automatically indexed. Also, qualified expenses that are paid before death by the covered insured, can not be deducted, if funds came from a tax-free distribution from an MSA, HSA, or Archer MSA.

 

Investment Options

A “fixed interest” option is the safest choice since interest will be paid on eligible amounts each months. When marketplace interest rates are low, the  rate-of-return, although fixed and safe, will not match the rise of inflation. However, you will not lose money, and diversifying a portion of your assets is always highly recommended. It is possible interest will not be paid on the entire amount, and with lower balances, the administrative fee could exceed the amount of interest earned.

By investing the HSA contributions into one (or more) diversified mutual funds, the rate-of-return on your investment may  (not guaranteed) be significantly higher than utilizing the fixed-interest concept. It is important to consider the expense-ratio of the funds you are reviewing, along with the historical performance. Of course past performance (good or bad) does not guarantee that future performances will be similar. A Certified Financial Planner (CFP) or your own personal investment advisor may be a valuable resource to help  determine your risk tolerance, and which funds best match your objectives.

 

Preventative Benefits Covered At 100%

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. OBGYN visits, baby well-check, and mandated diagnostic testing is also included with all copays and coinsurance waived. However, resulting complications or newly-discovered medical conditions may result in some out-of-pocket expenses. Vaccinations, cancer, diabetes, hepatitis, and HIV screenings, blood pressure and cholesterol testing, smoking and alcohol cessation counseling, and many other services are typically covered. Adult, women, and children services are updated yearly.

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%.  If you need an MRI, often the savings is more than $1,000. It’s not uncommon to see a an inpatient hospital visit receive a cost reduction of several thousand dollars.

You can also receive favorable deals with banks when utilizing their services for setting up the separate account. Often, membership fee reductions from health spas and exercise establishments are made available. Initiation and set-up expenses may be reduced or eliminated, and ongoing monthly payments (YMCA, JCC, spas etc…) may also be positively impacted.

 

How Does National Healthcare Reform Affect An HSA?

In March of 2010, Congress spared the tax break that HSAs offer. Legislation, in fact, made make them more popular than ever, especially if you are eligible for little or no tax subsidy from the government. These contracts have been in existence since 2003 and remain very popular. However,  over-the-counter medicines are no longer a qualified expense that can be paid from your HSA. This eliminated the deductibility of vitamins and many generic drugs that changed from prescription to over-the-counter. However, insulin, and many supplies, such as reading glasses, bandages, crutches, walkers, wheelchairs, canes, catheters, and contact lens solution.

HSA qualified  plans will continue to be offered, unless a massive US healthcare overhaul occurs. And although there is still  much debate in Congress regarding the future of “The Affordable Care Act,” even with a major shakeup in Congress, tweaking the legislation is much more likely than an outright repeal. President Trump has indicated that he will enhance the popularity of HSAs with several new changes. Increased tax deductions are a possibility.  Note: The Supreme Court ruling in June of 2012 did not change the future of HSAs and  all other plans remained in place. We don’t expect future legislation to challenge the legality of the tax deductions, although the Affordable Care Act will undoubtedly  undergo modification.

 

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. However, it is possible to have one spouse covered on an employer-provided plan, while the other spouse and dependents are covered under an HSA. At any time, if the spouse covered under the Group plan leaves their employer, they can be added to the existing HSA contract.

When the children leave the contract (reaching age 26), they can take out their own plan. They also will not have to wait for Open Enrollment at the end of a calendar year since they would likely qualify for an SEP (Special Enrollment Period). If they voluntarily terminate benefits for no specific reason, they may not be eligible for immediately choosing another policy. Depending on their employment situation, a group policy may be offered. Also, dependents and spouses that are terminated from existing coverage, can choose short-term or limited-benefits plans. Although inexpensive, these policies may not provide the needed medical protection resulting from a large claim.

Hsa Contributions

Contributions Are Flexible

 

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. Thus, many persons are forced to spend funds late in the year, on unneeded items. For example, if during the calendar year, there were very few expenses, it’s not unusual to have hundreds of dollars remaining in the account. If larger contributions were made, the amounts can be higher.

Thus, it’s not unusual to purchase several unneeded pairs of glasses in December, or risk losing funds. 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. You can also deposit larger amounts of money, in anticipation of an upcoming surgery or procedure. If  a major surgery occurs during the last three months of the year, it is easier to make multiple deposits  for different tax years for the same medical event.

Other differences between an HSA and an FSA:

Owning a HDHP is a requirement of an HSA, but not an FSA.

The HSA individual contribution limit is higher ($3,450 vs. $2,600).

An HSA has higher growth potential since funds can remain in the account longer.

Level of contribution can be changed throughout the year with an HSA, but not an FSA.

Your HSA account is portable, while the FSA (with some exceptions) is lost of you change employment.

 

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 most situations, it’s better to own only one contract to avoid paying any excess fees. Generally, each account will be assessed approximately $2-$4 per month in monthly maintenance charges.  If fees exceed $5, it may be the right time to choose another financial institution. Also, if you have a Group plan through your employer, an additional medical plan can not be purchased, unless it is a supplementary or ancillary product. For example, a cancer or critical illness rider or policy is allowed.

Note: Although  hundreds of financial institutions offer attractive account options,  several of the highest-rated providers that offer no-fee accounts are Modern Woodman Bank, Saturna Capital, First Community Credit Union, AmeriCU, First Internet Bank, Universal 1 Credit Union, Pathways Financial Credit Union, Macatawa Bank, Norway Savings Bank, Bellco Credit Union, Forum Credit Union, KeyBank, Choice Financial Group, First American Bank, and SPIRE Credit Union.

 

What Medical Expenses Are IRS-Qualified?

Section 213(d) of the Internal Revenue Code provides the definition of “qualified.” Some of the most commonly-used expenses include:

Acupuncture

Alcoholism treatment

Ambulatory services

Annual physicals

Artificial limbs and teeth

Braille books and magazines

Breast reconstruction after mastectomy resulting from cancer

Capital expenses (special equipment)

Chiropractor

Contact lenses

Contraception (prescription only)

Counseling

Crutches

Dental

Dermatologist

Diagnostic tests

Drug addiction treatment

Emergency room

Fertility treatment and enhancement

Gynecologist

Guide dog (and other service animals)

Hearing aids

Hospital (inpatient and outpatient)

Laboratory fees

Lactation expenses

Lead-based paint removal

Medical conferences

Nursing home

Obstetrician

Oxygen

Pregnancy test

Podiatrist

Postnatal and prenatal treatment

Psychiatrist

Psychologist

Psychoanalysis

Sterilization

Therapy

Transplants

Vasectomy

Vision care

Weight loss treatment

 

What Expenses Are Not IRS-Qualified?

Baby-sitting and nursing services for healthy child

Controlled substances

Cosmetic surgery

Wheelchair

Wig

Dancing lessons

Diaper service

Illegal operations

Hair transplants

Maternity clothes

Health Club fees and dues

Nutritional supplements

Swimming lessons

Teeth whitening

Weight-loss programs

 

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. Purchasing items not related to healthcare will no longer incur a penalty, although the withdraw amount will be taxable. Widowed spouses can also utilize funds inside the account, regardless if they owned a previous account.

If you have built up thousands of dollars in the account, it may last quite a while! Often, your out-of-pocket expenses (after age 65) are much smaller than they were prior to age 65 because of the availability of Medigap and Medicare Advantage plans. Part D prescription drug plans are offered, and many Advantage contracts also include drug benefits.

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. There are many available options, regardless if you need short-term or long-term coverage. If you become Medicare-eligible in the middle of the calendar year, you do not have to wait for October Open Enrollment to purchase a Medigap plan. Once you have enrolled in Parts A and B, you can choose  a supplement, Advantage and/or Part D prescription drug coverage.

 

What HSA Plans Are Available For 2018?

We have listed below many of the popular plan options in selected states:

Georgia – Kaiser KP GA Signature Silver 2750/20%/HSA, Kaiser KP GA Signature Bronze 6200/40%/HSA, BCBSHP Bronze Pathway X HMO 0 For HSA, BCBSHP Silver Pathway X HMO 10 For HSA, Ambetter Essential Care 2 HSA

Ohio – Medical Mutual HMO 6400 HSA and HMO 5250 HSA, Caresource HSA Bronze, Oscar Saver Silver Plan, Oscar Saver Bronze Plan, SummaCare Bronze 5000 HSA

New Jersey – IHC Silver EPO HSA, OMNIA Silver HSA, OMNIA Bronze HSA

North Carolina – BCBS Blue Value 6650,  BCBS Blue Advantage 6650

Pennsylvania – UPMC Advantage Silver HSA

Texas – IdealCare HSA, Community Health Choice HMO Bronze 008 High Deductible Health Plan, FirstCare Bronze 100% HSA, FirstCare Silver 100% HSA