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June 01, 2009
Health Savings Accounts Spell Health Insurance Relief
Your employer may have switched to a high-deductible plan in an attempt to keep soaring health insurance costs in check. The cost of care is pass to you until you reach your deductible, but the premiums are much lower. Along with the high-deductible plan, you can open a Health Savings Account that allows you to contribute pre-tax dollars to the Health Savings account where it can be invested and grow until needed to pay for medical care.
Unlike a Flexible Savings Account offered by many employers, the money in an Health Savings Account can be rolled over from year to year and even remain under your control if you lose or switch your job.
Whenever you need to pay for medical care, the money can be withdrawn your Health Savings Account (HSA) and used tax free to pay your medical bills. The money can even be used to pay for long-term health insurance.
There are limits to annual contributions to an HSA. For 2009 the limit is $3,000 for individuals and $5,950 for a family. If you are over age 55, you can contribute an additional $1,000.
Not all health plans qualify for an HSA. For 2009 the deductible must be at least $1,150 for individuals or $2,300 for a family. The annual out-of-pocket expenses (deductible and co-pays) can’t exceed $5,800 for an individual or $11,600 for a family. You won’t qualify if you are age 65 or older or if you are covered by any other health plan that is not a qualified high-deductible plan.
Check with your benefits administrator at work to see if your company offers an HSA-eligible plan. If you are self employed or currently out of work, visit our HSA for America website to learn more about Health Savings Accounts and what they can do for you.
You can also watch our HSA video presentation to learn more about Health Savings Accounts.
Posted by Wiley Long at June 1, 2009 12:53 PM