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November 06, 2007
Easy Steps to get you Started on Health Savings Accounts at HSA for America
Thanks to legislation that became effective this year, it is not too late to make a full tax-deductible contribution to a Health Savings Account (HSA).
Health Savings Accounts are tax-advantaged accounts that help you save for medical expenses. Funds roll over from year to year and investment earnings are tax-free, so an HSA is also a great savings vehicle for you, your family and your practice.
Learn the four easy steps to get you started with an HSA:
Step 1 — Know the facts:
Health Savings Accounts can give you more control over your health care expenses and allow you to take advantage of lower premium health insurance plans. Through online instant quotes which allow you to compare HSA plans and options, extensive information, and individualized help, HSA for America can help you decide if an HSA solution is right for you.
Step 2 — Make sure you have the right health plan:
Before you open your HSA, you must have an HSA-qualified high deductible health plan. Only HSA-qualified health plans let you make pre-tax or tax-deductible contributions to a Health Savings Account. In 2007, the minimum deductible is $1,100 for individuals and $2,200 for families. HSA for America agents are available to help you shop the marketplace, obtain quotes and compare plans.
Step 3 — Open and fully fund your HSA:
Just visit our HSA Administrator page to find a list of the best available administrators in the marketplace today. You can fund your HSA with tax-deductible dollars or jump-start your account using funds from an existing flexible spending account, health reimbursement arrangement or individual retirement account.
Step 4 — Start using your HSA:
Free debit cards, checks, mutual fund options, and online account management make it convenient to put your HSA to work for you. These are just a few of the options you will find with our recommended HSA Administrators.
Find out more about what a Health Savings Account can you for you today at: http://www.health--savings--accounts.com
Posted by Wiley Long at November 6, 2007 09:29 AM
Comments
Elsewhere on your website you advocate delaying reimbursement from your HSA until retirement age.
I disagree unless you are not eligible and/or already fully funding your Roth IRA ($10,000 for a married couple in 2008).
Why not take reimbursements from your HSA when in the same year you are allowed and deposit them in a Roth IRA?
Then you get to spend the Roth IRA on anything tax free in retirement where the HSA is only tax free on medical expenses.
Not only that, if you live in a state that taxes HSA contributions/interest (like CA) you save on your state tax with depositing your HSA reimbursements to a Roth IRA.
Also my HSA has less than ideal investment options with expense fees in 1-2% range and my Roth IRA fund expense fees are < 0.1%.
Posted by: Mike at November 13, 2007 04:08 PM
Mike,
Yes, if you are not fully funding your Roth, then I agree that this makes sense. Your HSA reimbursement is tax-free, and placing it in your Roth would enable you to withdraw it in retirement tax-free for any reason, including non-medical expenses.
However, if you needed the money before then to cover medical expenses, that withdrawal would be taxed, and penalized. Leaving it in the HSA would make it available before retirement for medical expenses. Since most people will have substantial medical expenses during retirement, it is likely that leaving it in the HSA would not have any detrimental tax consequences.
By the way, if you do not have an HSA with low fees and good investment options, you should switch to someone else. Your HSA is not legally tied to your insurance, and can be set up with any bank or administrator offering one. You can see a list of those we recommend at http://www.HSAforAmerica.com/admins.htm.
Posted by: Wiley Long at November 19, 2007 01:47 PM