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Complete
Information On How HSA Plans Will:
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- Save
You 40% to 50% On Your Health Insurance
- Make
Your Medical Expenses Tax Deductible
- Cut
Your Taxes By Up To $1850 Or More
- Help
You Build An Additional Retirement Account Of Up To
$954,000 Or More
Plus
How To Get Started!
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| Additional
Info: |
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HSA
Teleseminar: |
| Listen
to a free teleseminar
where HSAs are spelled out in detail. |
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| HSA
Newsletter: |
| Subscribe
to Maximize Your
HSA, and learn how to get maximum
value from your HSA. |
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Watch
this 4½ minute video
that explains how HSAs work,
and the benefits these plans offer.
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I forward your newsletter to everyone on my
list. I just wish more people could grasp the
benefit of having this sort of plan. People
have too narrow a focus about what is mainstream insurance
and don't know there are alternatives. The main
benefits of having an HSA-qualified plan are:
- big
money savings!!!
- tax-deductible
health insurance!!
- keeping
my money instead of paying out insurance premiums
that I never used anyway!!
Thanks,
Cassandra
E. Vance
South Daytona, FL
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How Health Savings Accounts Work
Health
Savings Accounts (HSAs) are simple and easy to understand.
A
Health Savings Account is a tax-favored savings account
combined with a qualifying high-deductible
health insurance plan. By allowing you to deposit
tax-deductible funds into an account that you can use to
cover medical costs, HSAs enable you to take control of
your own health care decisions.
First
you must have a high-deductible
health insurance plan that qualifies to be partnered
with an HSA. These plans are available through various
insurance companies, depending in what part of the country
you live. The plans are all similar in the fact that
they have deductibles between $1,100 and $5,600
for singles, and between $2,200 and $11,200
for families.
Once
your insurance policy has become effective, you may fund
your HSA account.

Tax
Deductible Contributions
HSAs
allow you to legally avoid federal income tax by saving
up to $2,900 for singles or $5,800 for families,
into your HSA account*. There is no minimum deposit
(it can be $0 if you want), but whatever you deposit into
your account by April 15 is an "above the line"
tax deduction for the previous year's income taxes.
This means that you get a federal income tax deduction for
money you put in even if you take the standard deduction
and dont itemize deductions. This tax deduction
is available to everyone, with no limitations on the amount
or source of income.
If
you cancel your HSA-qualified health insurance before you've
had the coverage for a full 12 months, your maximum contribution
amount is pro-rated based on the number of months you had
your coverage in force.
A
one-time roll-over from your IRA (Individual Retirement
Account), HRA (Health Reimbursement Arrangement) or FSA
(Flexible Spending Account) is allowed.
If
your employer makes an HSA contribution for you, it is excluded
from income, and not subject to any income tax or FICA.
Either way, this will immediately reduce your federal
income tax due for the year. Most states also allow
you to take a state income tax deduction for HSA contributions.
To see if your state offers tax deductions, please see our
HSA State Income Tax
page.
IMPORTANT:
You must have your HSA-qualified health insurance in
place by December 1st in order to qualify for a 2008 tax
break. You only have
, so you should apply as soon as possible.
*
Individuals age 55 and over may deposit into their account
(and take a tax deduction on) an additional catch-up contribution
of $900 in 2008.

Tax-subsidized
Medical Expenses
Even
though you have received a tax deduction by putting your
money into this account, the money is still yours to
spend tax free, as long as you spend it on qualified
medical expenses. Since you have a high-deductible
plan, this would of course include any expenses you incur
from going to the doctor, purchasing prescription drugs,
or paying other expenses toward your deductible. Once
your deductible is met, the health insurance covers your
medical expenses as defined in the policy.
In
addition to being able to withdraw your money tax free to
cover these types of expenses (which might otherwise be
covered by a traditional low-deductible high-premium policy),
you can use your HSA account to cover other costs that would
not normally be covered by a health insurance policy.
These
include:
-
Dental
expenses. Individuals can typically only purchase
dental discount plans, or fairly expensive dental policies
with a limited choice of dentists. Coverage for
braces is normally very limited. However, any
of these medically necessary procedures can be paid
for from your HSA account.
- Mental
therapy. This includes the charges of psychiatrists,
psychologists, psychoanalysts, and psychotherapists.
- Physical
therapy. This could include hydrotherapy, chiropractor
services, or medical massage therapy.
-
Alternative
treatments. This could include acupuncture,
Ayurvedic Medicine, aromatherapy, homeopathy, Traditional
Chinese Medicine (TCM), nutritional consulting, or even
healing services provided by a Christian Science Practitioner
or other type healer.
- Transportation
and lodging expenses,
when related to health care
-
Charges
incurred as part of a preventive health program.
This could include vaccines, blood tests, metabolism
tests, and other lab tests, and even fees paid to a
health institute or vitamins if prescribed by a doctor.
- Nonprescription
medications, such as aspirin or cough syrup
-
Special
fees incurred by handicapped individuals, including
wheelchairs, telephone or TV equipment to assist the
hard-of-hearing, the cost and care of guide dogs, or
special school costs for the handicapped
- Maternity
expenses that are not covered by your health insurance
policy
- Insurance
premiums to pay for qualified long-term care
Also
note that the HSA account can be used to pay these expenses
for any spouse or dependent member of the family, even
if they are not covered under the insurance policy.
More
complete information can be seen on our Qualified
Expenses page.

Premium
and Tax Savings
Health
Savings Accounts can help you save money on both your insurance
premiums, and your income taxes. Because HSAs must
be paired with a high-deductible health plan, your health
insurance premiums are normally much lower than a typical
plan that has a $500 deductible. And there
is no other investment that offers a tax deduction today
along with a tax-deductible withdrawal tomorrow. The
savings from the lower premiums along with the tax-free
deductions could be $5,000 or more every year.
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Let's
see what you could save

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Typical
Non-HSA Plan
Individual deductible:
$500
Coinsurance: 80% - 20%
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Typical
HSA Plan
Aggregate Family deductible:
$5,800
Coinsurance: 100%
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Premium
Paid
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-
$8,556
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-
$4,872
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Your
share of medical expenses ($1,500
claim)
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-
$700
$500 for deductible,
$200 for coinsurance
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-
$1,500
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Non-covered
medical expenses
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-
$550
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-
$550
(dental and eye wear expenses)
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Expenses
Subtotal
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=
- $9,806
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=
- $6,922
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Federal
Tax Savings*
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+
$0
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+
$1,624
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State
Tax Savings*
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+
$0
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+
$290
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Net
Expenses
(out-of-pocket minus savings)
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-
$9,806
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-
$5,008
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Total
Net Savings with HSA Plan
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.
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=
+$4,798
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This
example is based on the average health insurance premium
of an individual with a family of four living in a metropolitan
area, covered medical expenses totaling $1,500,
and $550 in expenses for dental care, contacts
and eyeglasses. Health insurance premiums vary
substantially based on age, geographic location and
other variables. Federal tax savings calculations
assume that contributions are deducted from federal
taxes. Withdrawals for nonqualified expenses prior
to the age of Medicare eligibility are subject to a
10% penalty by the IRS.
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| * |
Your
rate may vary. Assumes a 28% federal tax
bracket and 5% state tax bracket on deposit of
$5,800, the maximum contribution allowed with
a $5,800 deductible. Most states allow for
state tax deductions
on HSAs.
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HSA
for America
and its affiliates are not engaged in rendering
tax, investment or legal advice. Federal
and state tax regulations are subject to change.
If tax, investment or legal advice is required,
seek the services of a licensed professional.
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"Our
medical insurance is now costing less than half
of what it was before we got an HSA (we're saving
over $3,500 a year in premiums), and we can save
federal-tax free."
I
very much appreciate what you have done for my wife
and I. HSA for America
offered us a great variety of plans to choose from.
Our medical insurance is now costing less than half
of what it was before we got an HSA (were
saving over $3,500 a year in premiums), and we can
save federal-tax free.
HSA
for America provides outstanding service.
Most other companies have you on hold and entering
numbers on the phone until you are completely fed
up. While you provide all the questions and
answers. I did not even have to ask questions
- you have provided all the questions and answers
for me.
I
talk very favorably to my friends about your company.
Beryl
Sanders
Loomis, CA
Read
More...
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Long-term
savings
A
particularly appealing aspect of HSAs is that they encourage
individuals to stay healthy. Any money from your HSA
account that is not used to pay medical expenses is yours
to keep. The money grows in the account free from
federal taxes and remains free from federal tax when you
take it out if it is used for qualified medical expenses.
If you withdraw funds for non-medical expenses, you
pay taxes on the amount withdrawn. There is a 10%
penalty if the funds are withdrawn before age 65
for a non-medical expense, but after age 65 they
can be withdrawn penalty-free for any reason (you do pay
income tax on the money withdrawn).
Because
all your deposits that are not used to pay medical expenses
grow tax-deferred, the investment opportunity is tremendous.
Potential return depends upon the interest rate at
which your investment grows, and on how much of your deposit
is used to pay medical bills. Investments can be placed
in savings accounts paying 1 - 4%, or in stocks,
bonds, or mutual funds with higher potential returns.
For
most Americans, out-of-pocket medical expenses are a relatively
small expense each year. This chart shows annual medical
expenses for the United States population by percentage:
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Money
Spent on Medical Care Annually
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Percentage
of U.S. Population
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No
Medical Expenses - $0
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33%
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$1
- $500
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40%
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$501
- $1,000
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9%
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$1,001
- $2,000
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7%
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$2,001
- $5,000
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6%
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$5,001
- $10,000
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3%
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$10,001
- $25,000
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3%
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$25,001
- $50,000
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.5%
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$50,001
- $100,000
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.2%
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$100,001
- And Up
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.05%
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If you regularly fund your HSA, and are fortunate enough
to be healthy and not use a lot of medical care, a substantial
amount of wealth can build up in your account.
Long
Term Savings Chart

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Individual's
Savings HSA Growth Over 30 Years.
Based on a maximum yearly contribution of $2,900
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Family's
Savings HSA Growth Over 30 Years.
Based on a maximum yearly contribution of $5,800
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Medical
Expenses
Per Year
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4%
Annual
Return
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10%
Annual
Return
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$0
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$162,646
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$477,033
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$500
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$134,604
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$394,785
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Medical
Expenses
Per Year
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4%
Annual
Return
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10%
Annual
Return
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$0
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$325,292
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$954,065
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$1,000
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$269,207
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$789,571
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| Note: |
These
savings are based on 4% and 10% interest
rates. Your interest rate will of course vary
depending on your investment and the prevailing market
conditions. There are many companies that can
administer your Health Savings Account. Some offer
a fixed interest rate, while others allow you to place
your investment into stocks, bonds, or mutual funds.
You can visit our HSA
Administrators page for complete details.
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To calculate
the future value of your own HSA based on your deposits,
investment return, and number of years until retirement,
please use our HSA
Future Value Calculator.

How
to Choose an HSA
First,
review all the information on this page and check out our
Q & A section to familiarize
yourself with HSAs. Then visit our How
to Guide to learn how to choose the right
plan, how to apply for coverage, and how to set up your
HSA
If
you are looking for coverage for a small business, please
see our Small Group HSA
Plans page for our recommendations.
"The
HSA for America web site is the best Ive seen
a wealth of information"
The
most frustrating thing about shopping for health
insurance has been getting good unbiased advice
from a knowledgeable firm. I have been literally
hounded by salesmen marketing "insurance"
that was really just a discount medical plan.
In addition, working directly with the insurers
themselves was sometimes frustrating - as their
representatives were typically not very responsive.
With HSA for
America, I received prompt and
courteous service from knowledgeable representatives.
The HSA for
America web site is the best I've
seen - a wealth of information for somebody shopping
for an HSA eligible insurance policy as well as
HSA account administrators.
Thanks
for your advice and service - I hope we can continue
a mutually beneficial relationship for years to
come. When the opportunity presents itself,
I will definitely recommend
HSA for America.
John
Janney
Anthem, AZ
Read
More...
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HSA
for America Additional Benefits
Health
Savings Accounts are meant to get the consumer more involved
in their healthcare decisions. By encouraging consumers
to shop their healthcare, HSAs encourage competition among
providers and lead to lower costs. To assist our clients
and visitors in reducing their medical expenses and income
taxes and maximizing their HSAs, we have put together an
exclusive package of money-saving benefits. Learn
how to reduce your costs for prescription drugs, lab fees,
hospital bills, and more: HSA
for America Additional Benefits.

Overall
impact of HSAs
We
truly believe that Health Savings
Accounts are one of the best things to come out
of Washington in a long time. They encourage several things
that are positive for America's future:
-
HSAs
put market competition back in the healthcare arena.
Ever since most first-dollar expenses have been
paid for by a third party (insurance companies), medical
expenses have soared. We believe that individual
consumers are better able to decide how and where to
spend their health-care dollars than are insurance companies.
People who buy medical services using their personal
HSA funds will shop around for the best value for their
dollars, and health care providers will feel pressure
to charge competitive rates to attract patients. In
other words, doctors will shift their focus from serving
the insurance companies back to serving their patients.
-
HSAs
encourage people to stay healthy. By making
many preventive expenses eligible for coverage through
HSA accounts, and by letting people keep any money they
don't use, HSAs provide a powerful incentive for people
to take a more proactive approach to their own healthcare.
-
HSAs
let consumers choose how to spend their own health-care
dollars. Only by giving individuals the freedom
to make their own choices can we as a society learn
of the best solutions. By allowing the use of
HSA funds to pay for alternative, holistic, and preventive
treatments, innovation and investment will be encouraged
in areas where the current system has failed to find
solutions. And people will be able to use the
type of medicine that works for them. The
end result should be a healthier populace with access
to a wide choice of treatment options.
"I
love the idea of HSAs philosophically because it reintroduces
capitalism into the medical profession where it no
longer exists."
I
love the idea of HSAs philosophically because it reintroduces
capitalism into
the medical profession where it no longer exists.
I like the idea of the consumer actually being the
payor of services rendered. I think that's the
ultimate price control. If I don't like the
price, I take my business elsewhere. I get to
make the decision about what can/can't be spent on
my medical care.
From
a practical standpoint, I hate paying $7,200 in premiums
per year for services not needed, especially if I
still need to pay the $1,500 deductible. So
that's $8,700 dollars paid before I really start "benefiting"
from owning insurance. I can afford the premiums,
but it's just not a financially sound use of my hard
earned dollars. I make enough income to fund
a few thousand dollars per year of out of pocket dental
and preventive medical expenses. I believe
if everyone switched to the HSA concept, there would
be no discussion of the high costs of medical care
for the average American.
Joy
Amulya
Research Associate and Lecturer, University of Colorado
Health Sciences Center
Fort Collins, CO
Read
More...
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