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June 28, 2005
The Benefits of an Unfunded Health Savings Account
Some individuals may choose to purchase a qualifying high deductdible health insurance plan (HDHP), but not fund a Health Savings Account (HSA). What would be the point in that you ask?
Here are the benefits:
Lower premiums - Individuals can take advantage of a HDHP without having to open an HSA. High deductible plans are much more affordable than typical insurance policies.
Features - Clients who are unable to fund an HSA can still get the features of an HDHP, such as a family aggregate deductible.
Post-claim account funding - Some people may not want to fund their HSA right away, but wait until you have a medical expense. That way, instead of paying the medical bill directly out of your pocket, you first put the money in the HSA, then take it out to pay for (or reimburse yourself for) the medical bill. The expense then becomes tax deductible, knocking a large percentage off of your healthcare expenses, but without requiring the upfront cash needed to fully fund your Health Savings Account.
Someone who does this misses out on the tremendous tax savings opportunity that HSAs provide, but can still end up with much lower health costs than if they chose a traditional health insurance policy without an HSA.
Find more Health Savings Account inforamation at HSA for America
Posted by Wiley Long at June 28, 2005 10:26 AM