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August 26, 2010
Can A Health Savings Account Help You Bridge Employment Gaps?
Health Savings Accounts may have been stifled by complex regulations, but these accounts can do much more than just turn your healthcare bills into tax deductions. With unemployment a constant threat, health savings accounts help people maintain coverage between jobs, and even into retirement.
Anyone under 65 can start a Health Savings Account once they buy a qualified high-deductible health insurance plan. That's an insurance plan with a deductible of at least $1,050 for individuals or $2,100 for families. These plans mush also have a limit of $5,250 for an individual and $10,500 for a family on their out-of-pocket costs.
HSA Plans have a great advantage over flexibility spending accounts for medical expenses because, unlike flexible spending accounts, HSA contributions and gains roll over from year to year. Any funds not used annually in a flexible savings account are lost at yearend or when employment ends. All withdrawals from a Health Savings Account must be for qualified healthcare expenses otherwise you face a penalty of 10 percent.
Health Savings Accounts are completely independent of employment so these funds can be used as a “safety net” when jobs are lost, or workers move to new jobs. After retirement, these accounts also offer another investment option with tax deductions on contributions, tax-free growth and tax-free withdrawals to pay for healthcare costs. There's just one caution once you retire: withdrawals to pay for something other than qualified healthcare expenses are still taxable after age 65.
To find out more about how HSA plans differ from flexible spending accounts, visit our website for information about health savings accounts and the high-deductible insurance plans that are qualified to work with them.
Posted by Wiley Long at 10:03 AM | Comments (0)
August 23, 2010
Health Savings Accounts: Why Have Ten Million People Enrolled?
As of January 2010, ten million Americans already have a Health Savings Account (HSA) and this form of tax-advantaged saving to pay medical expenses has only been available since 2004. Why are these plans growing so fast?
The number of people enrolling in a Health Savings Account increased by 25 percent since 2009. The fastest growing market for HSA plans was for large-group coverage, followed by small-group coverage. Thirty percent of those with an HSA were in the small group market, and 50 percent were in the large-group market.
Another 20 percent were individuals who paid for their own health insurance coverage. There are now 2.1 million people who have enrolled in HSA plans who pay for their own coverage.
You can learn more about Health Savings Accounts, the high-deductible insurance plans that work with them to keep premiums low, and how to reduce your taxable income with online resources on our website.
Posted by Wiley Long at 10:03 AM | Comments (0)
August 19, 2010
Health Savings Accounts: Can You Cut Your Healthcare Expenses With One?
Millions of Health Savings Account owners are trying to do just that. They have already deposited billions of dollars with the intent of covering their future medical expenses with tax-deductible dollars.
Why are Health Savings Accounts so attractive? You can invest tax-free money in a Health Savings Account and still control the type of investment. You can choose anything from savings accounts to a full brokerage house.
Unfortunately, there's less choice in healthcare itself. Policies in the U.S. still limit competition and make it difficult for consumers to comparison shop for doctors and hospitals. The answer is clearly to build more competition and empower consumers to drive down prices and increase access to and the quality of healthcare.
The growth of HSA plans has already helped to increase transparency and competition in the medical industry. Doctors are becoming more available by phone, medical kiosks are moving into malls, certain doctors with substantially lower rates now only accept cash payments and more doctors are competing for consumers’ healthcare dollars.
The market will respond as more and more consumers use health savings accounts to fund their medical care. Providers will begin to compete more by increasing quality and service that can benefit all consumers. You can stay up-to-date on the growing opportunities of HSA plans with the news updates on our website.
Posted by Wiley Long at 01:17 AM | Comments (0)
August 14, 2010
Health Savings Accounts: Why Are Customers Investing Record Amounts In Them?
J.P. Morgan Treasury Services manage more than 530,000 health savings accounts for people who have deposited a combined total of approximately $800 million nationwide. Health savings accounts are growing so fast because they allow individuals to save tax-free to pay their future medical bills.
At the end of 2009, 45 percent of J.P. Morgan's health savings account (HSA) customers held more than $1,000 in their accounts. That represented a 10 percent increase from the previous year.
The percentage of accounts that held more than $2,000 also went up from from 20 percent to 31 percent during that same time period. Last year, more than half (68 percent) of these HSA owners added more to their health savings accounts than they spent every month.
Health Savings Accounts have become integral to the effort to encourage us to become better healthcare consumers. These tax-advantaged accounts can be paired with certain qualified high-deductible health policies that keep premiums low by requiring individuals to pay the first $2,500 and families to pay the first $5,000 of their medical bills. Employers and employees can both contribute to an HSA tax-free, and those deposits can be used to pay for medical expenses until the deductible is met.
As long as health savings account funds are used for HSA qualified medical expenses, no taxes are paid. On Jan. 1, the penalty for withdrawing health savings account funds for non-medical purposes will be increased to 20 percent. Once you turn 65, you can withdraw without facing any penalty, pay the taxes and you're free to use your health savings account balance for any purpose. If you want to learn more about the advantages of health savings accounts, check out our website for breaking news links, strategies to set up an HSA and tips to get the greatest value from your HSA.
Posted by Wiley Long at 10:28 AM | Comments (0)
August 11, 2010
Health Savings Accounts See Increase in Popularity with New Healthcare Law
After a slow-down, Health Savings Accounts are rebounding in popularity after the passage of the new healthcare laws. "The number of requests for HSA proposals and requests for HSA information are up a lot for January enrollments from Fortune 500 groups," according to the president of HSA Bank, Kirk Hoewisch.
As President Obama was poised to sign healthcare reform into law, employers seemed to cautiously stall major health insurance decisions. Would Health Savings Accounts remain a part of U.S. healthcare?
"There is a consensus that Heath Savings Accounts will continue to exist," says Kunal Pandya. He's the senior analyst for health insurance and payments at Aite Group LLC in Boston. Regulators continue to redefine the rules for Health Savings Accounts as well as health insurance, but certain restrictions are already known, such as what are qualifying purchases for Health Savings Account fund withdrawals. It's also clear that in 2013, the minimum threshold to claim an itemized deduction for healthcare expenses will increase from 7.5 percent to 10 percent of adjusted gross income.
It's still possible that Health Savings Accounts will be rendered irrelevant sometime in the future, but many banks and financial institutions are looking for partnerships with health insurers to promote Health Savings Accounts for the time being. To stay up-to-date on the future of HSA Plans, HSA for America maintains extensive resources to aide in establishing Health Savings Accounts and daily news updates.
Posted by Wiley Long at 09:20 AM | Comments (0)
August 08, 2010
High-deductible Health-insurance Plans Attract Employers
Despite mixed reviews, the high-deductible health plans that typically keep premiums low and their linked health savings accounts are becoming increasingly popular with employers. With only minor changes from new healthcare laws, it's still cheaper for employers to provide HSA Plans to employees than to provide comprehensive health coverage.
HSA plans were created by a 2003 law that linked Health Savings Accounts to qualified high-deductible health insurance plans. HSA Plans allow people to increase savings with tax-free interest, and use the savings to cover deductibles and other medical expenses. Both employers and employees can deposit into these accounts, but the funds belong soley to the employee. That's very different from flexible spending accounts. With those, employees lose everything in the account they haven't used at the end of the year or whenever their employment ends.
The new healthcare laws did change the defininition of qualified healthcare expenses. As of January, you will not be allowed to purchase over-the-counter medications (aspirin, cold rememdies, etc.) with Health Savings Account funds unless a doctor prescribes these. Using a Health Savings Account for unqualified expenses will incur a 20-percent penalty, and that's double the earlier 10-percent penalty.
This change may be in response to a 2008 Government Accountability Office report that concluded the average household income of those with Health Savings Accounts was about $139,000. As a whole, taxpayers' average household income is only about $57,000. It seems that primarily higher-income households benefit from HSA Plans. Still, more employers are offering HSA Plans in attempts to replace comprehensive health insurance plans. Almost half of all companies with over 10,000 employees have already done so, and small-business owners are offering HSA Plans as well.
The new healthcare laws have also affected insureres. When nHealth of Richmond went out of business, it blamed new requirements that insurers spend 80 to 85 percent of the premiums they collect on clinical services and quality measures, or give customers rebates. News reports have suggested this claim was intended to obscure the fact that the company that was losing money before new regulations. Now, there may be fewer insurers in that area to offer HSA-compatible plans.
Posted by Wiley Long at 11:25 AM | Comments (0)
August 05, 2010
Health Savings Accounts: Do They Work With Low-cost Plans?
High-deductible health insurance plans, in general, offer lower premiums in exchange for the insured accepting part of risk. They agree to pay for their healthcare costs upto an annual deductible. In effect, they are putting a cap on their out-of-pocket expenses. The high-deductible health insurance plans that are qualified to be combined with Health Savings Accounts also offer lower-cost premiums.
Leading insurance companies (such as Assurant HSA and Golden Rule HSA) have rate guarantees for up to three years. That enables you to lock in premium rates long-term. Most plans inevitably raise rates so this can give you an advantage. If premiums do decrease, you can still move to a better HSA plan when it becomes available, as long as your health allows you to change plans without medical underwriting concerns over pre-existing conditions.
With much of healthcare reform still being decided, it may pay to lock in the HSA plans and the rates you like now. If the situation changes, you'll have the plan you preferred and you can still change should a better deal come to market.
Posted by Wiley Long at 12:54 AM | Comments (0)
August 02, 2010
Health Savings Accounts Work like Checking Accounts
If you’re worried that any savings account that lets you earn tax-free interest while making healthcare expenses tax-deductible has got to have a lot of complicated rules, here's what you need to know.
Health Savings Accounts are so popular because they are user-friendly and they don't nickel-and-dime you with add-ons. Some accounts include free starter checks, free Internet access for ACH electronic transfers and free debit cards. You don’t even have to maintain a minimum balance.
A Health Savings Account (HSA) can help you reduce your taxable income, and still give you tax-free interest like an IRA. Unlike flexible spending accounts where you lose all funds not used by yearend, your HSA funds just roll over from year to year to keep growing faster than most savings accounts with tax-free interest.
At HSA for America, you can learn more about the best way to get started with their convenient online HSA How To Guide. Their experienced Personal Advisors are also available at no cost to answer your questions. Just call HSA for America at 866 749-2039 and they'll be happy to set up a convenient time to discuss your questions.
Posted by Wiley Long at 10:34 PM | Comments (0)