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March 09, 2010
A Health Savings Account Has Benefits Like an IRA
Health Savings Accounts offer a better way to manage health care costs with tax advantages that help you save. If you want coverage in case of a catastrophic major accident or illness that will leave you with overwhelming medical bills, a Health Savings Account is made for you.
A Health Savings Account is often abbreviated as "HSA", but it's typically called a health IRA in the financial industry. That's because a HSA works much like an IRA (Individual Retirement Account). When you set up a free HSA, you buy a High Deductible Health Insurance policy. If the deductible is $1,200, you pay the first $1,200 in medical costs before your insurance begins to cover charges.
In exchange for a high deductible, your monthly premiums cost less than premiums of other insurance plans. That’s because the insurance company does not have to pay for the small, frequent charges they cover in other policies.
In addition to lower monthly premiums, you’ll also get tax breaks. You can contribute a certain amount of money each year to your Health Savings Account just in case you have health-related expenses not covered by your insurance. If you need to pay for medical charges before your deductible is met, you’re covered with your HSA. If you don’t have expenses, you keep the money instead of paying it to an insurance company through higher monthly premiums.
In 2010, individuals can contribute $3,050, and families can contribute $6,150 to an HSA. Contributions can be made with pre-tax dollars through your employer, or you can take a tax deduction if you do pay for medical expenses with post-tax dollars. Anything you have left over at yearend rolls over to the next year. Year after year, your HSA balance keeps earning tax-free interest just like an IRA. When you retire, your HSA balance can be withdrawn like an IRA. You win whether you do or don’t have medical expenses.
That’s why the second largest bank in the U.S. added 115,000 new Health Savings Accounts last year, and those HSA owners deposited $220 million into their accounts with that one bank. That brought the total number of Health Savings Accounts at a single bank to 500,000 accounts holding a combined balance of $740 million. It’s easy to learn more about Health Savings Accounts and apply online at www.health--savings--accounts.com, but experts with years of experience with these HSA accounts will answer your questions at no cost when you call us at 866-749-2039. As with any retirement account, the sooner you act, the more you’ll save.
Posted by Wiley Long at March 9, 2010 10:44 AM