What is a Health Savings Account HSA?

An HSA account is really a combination of: a HSA health insurance policy and a separate custodial savings account for future health expenses called a Health Savings Account HSA. Congress created the HSA health insurance plan as a way to help cover your future health expenses, and it is subject to IRS regulations and guidelines. Click here for your HSA quote

A) A health insurance company provides the qualified health insurance policy (HSA). The cost of a HSA high-deductible health plan is 30% to 50% lower than a low-deductible health insurance plan.

A qualified HSA insurance plan has a single deductible that applies to all health expenses covered by the insurance policy whether you are insuring yourself or an entire family. This deductible must be satisfied each year before the health insurance company pays on any health claims.

The single deductible for an individual must be a minimum of $1,000 and can be any deductible up to the maximum out-of-pocket limit of $5,100 and the single deductible for a family must be at least $2,000 up to the maximum out-of-pocket limit of $10,250 for the year 2005.

B) A licensed HSA insurance administrator such as a bank usually acts as the custodian and administers the savings account portion of the Health savings account plan. Like an IRA, contributions to an HSA account are tax deductible and continue to grow tax deferred. Also, you can still deduct 100% of your monthly premium if you are self-employed.

The contributions to the HSA account can be used to pay for health care that is not covered under your traditional or PPO individual health insurance plan. Examples of some of these forms of treatment are vision, acupuncture, chiropractic and dental or health care.

All of your unused contributions to the HSA account will continue to grow. At age 65, you can use these accumulated funds as retirement income or to offset future health care costs such as long-term care. All of the money deposited into your personal HSA account is your money. If you change jobs or move, your HSA account still belongs to you.

You can save up to 100% of the individual deductible not to exceed $2,650 and you can save up to 100% of the family deductible not to exceed $5,250 for 2005 in your HSA account. These limits are also subject to annual cost-of-living adjustments. Amounts are pro-rated if you start the plan mid-year. Individuals age 55 to age 65 can contribute an additional $600 over the above limits in 2005 and the additional amount allowed increases by $100 each year until it reaches $1,000 in 2009. If both husband and wife are over 55, each can contribute the additional amount to an HSA account.

Four Great Reasons to Have a Health Savings Account HSA!

1) Unmatched Tax Advantages.

Federally Qualified contributions to a health care savings account can be deducted from your gross income when you file your federal income taxes. Most states also will allow a deduction on your state income tax return.

2. Tax Deferred Interest.

Unspent Funds left to accumulate in your health savings account HSA plan will grow by earning tax-deferred interest.

3. Reduced Insurance Premiums.

Insurance premiums are usually 30%-50% lower when you change from a low deductible to a high-deductible HSA health insurance plans. You can use these savings to fund your health savings account HSA plan.

4. Long-Term Savings.

You can choose to let the funds in your HSA insurance account grow tax-deferred. After age 65 you may make withdrawals from your HSA account for any reason without a penalty.

5. HSA Online Availability.

You can review the health savings account HSA plans from most health insurance carriers on this web site. Compare benefits, doctor availability, rates and purchase your HSA online.

6. HSA Availability.

Health Savings Account HSA plans are available in KS, IL, FL, OH, MO, TX, NE, CO, PA, WI, MI and DE.

Click here for your HSA online quote