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October 28, 2010
Health Savings Accounts: Five Things You Need To Know
More and more companies are switching to high-deductible plans that can be combined with tax-advantaged Health Savings Accounts to cover medical bills. Such plans usually have premiums of 10 to 40 percent less than traditional plans. Approximately 45 percent of large companies offer this option, and that’s an increase of 25 percent from 2007, according to the human resources firm Towers Watson.
To pay for health care, you can deposit pretax dollars into your Health Savings Account of up to $3,050 for individuals in 2011, or $6,150 for families, plus an extra $1,000 if you're 55 or older. Your employer may also contribute, and any unused funds roll over year after year to earn tax-free interest. Withdrawals for qualified health care expenses are also tax-free.
These types of HSA plans can make sense for healthy, young people who need little health care. They may also work if you need a lot of health care, such as when you develop cancer, according to Jay Savan, a consultant with Towers Watson and a financial planner. That’s because these plans limit your out-of-pocket expenses to $5,950 for individuals, or $11,900 for families. After that, you pay nothing more. With traditional plans, you'd never stop owing co-pay charges.
Both the deductible and your coverage can vary widely so it’s important to evaluate each HSA plan carefully before you enroll. Ask your insurer for a breakdown of your 2010 expenses so you can accurately compare how much you'd have to pay under different plans.
If you don’t spend all of your HSA balance on health care, the remainder grows tax-free like an IRA. Starting at age 65, you may withdraw funds without a penalty and use the money for any purpose, but you will owe income taxes on it.
Posted by Wiley Long at 10:34 AM | Comments (0)
October 25, 2010
Health Savings Accounts To Grow With Health Care Reform
Retirement savings have been the backbone of the financial investing industry, which is now looking to tax-advantaged Health Savings Accounts as the next big thing.
With a new mandate for more people to obtain health insurance, experts think many people will invest in lower-premium, high-deductible plans. That makes it likely that more people will also open health savings accounts in combination with the high-deductible plans.
With their tax advantages, health savings accounts have been growing rapidly in recent years and the president of the largest mutual fund recordkeeper for health savings accounts, John Vellines, says, "You're going to see an explosion of these assets."
Health savings accounts have already attracted $8.6 billion in deposits by allowing people to make health care expenses tax deductible. Industry experts forecast these assets will ultimately grow to $50 or $100 billion.
In 2010, only insurance plans with an annual deductible of at least $1,200 for individuals or $2,400 for families can be combined with a health savings account (HSA). Every year, approximately 30 percent of HSA owners fund their accounts to the maximum limit, which is $3,050 for an individual or $6,150 for a family in 2010.
Approximately 20,000 companies offered employees health savings accounts in 2009. The largest U.S. conglomerate, General Electric, stopped providing traditional healthcare plans in 2009. It offers an HSA plan to all 75,000 U.S. salaried employees.
To learn more about the advantages that are driving this move to health savings accounts on our website at http://www.health--savings--accounts.com
Posted by Wiley Long at 03:18 AM | Comments (0)
October 17, 2010
Health Savings Accounts Are Profitable For Credit Unions
Health saving accounts that work in conjunction with high-deductible health insurance plans are not just growing in popularity among employee groups, individuals and families. Forty-five percent of employers already offer high-deductible health insurance that's qualified to work with health savings accounts.
Even more employers are expected to offer health savings account (HSA) plans in the down economy. This increase in popularity positions credit unions to increase their share of the HSA-plan market.
Because HSA plans are increasing being sought by individuals and employers, HSA plans can boost credit union memberships, deepen their financial relationships with clients and provide additional earnings.
More information about HSA health insurance plans, including small group HSA plans and the tax advantages inherent in HSA plans, is available online on our website at http://www.health--savings--accounts.com
Posted by Wiley Long at 11:07 AM | Comments (0)
October 13, 2010
Health Savings Accounts: Your Insurance Against Unemployment And For Retirement
Health Savings Accounts have the potential to not only allow investors to cover their health-care costs with tax-free dollars, but to also help protect against periods of unemployment and during retirement.
If you are under 65, you can establish a Health Savings Account (HSA) when you choose one of the high-deductible health insurance plans that work with an HSA. You can even keep an HSA while you have another insurance policy, but you cannot have medical expenses paid by both your HSA and the other insurance.
To work with an HSA, health insurance plans need a deductible of at least $1,050 for individuals or $2,100 for families. In addition, health insurance plans must have a limit of $5,250 for individual and $10,500 for family out-of-pocket expenses.
One of benefits of HSA plans is the range of investment options available. Do you plan to use your HSA funds in the near future? If so, you will probably want a more liquid, interest-bearing account, such as a savings account. If you are more interested in saving long-term and do not expect to use your HSA funds right away, look at more lucrative investment options. You can learn how to maximize your HSA investment on our website with online resources regarding choosing your high-deductible insurance, selecting an HSA administrator and establishing your HSA to give you the greatest benefits.
Posted by Wiley Long at 08:51 AM | Comments (0)
October 07, 2010
Health Savings Accounts: How Will 2010 and 2011 Change HSA Limits and Tax Rules?
Health Savings Accounts function as tax-advantaged medical savings accounts. Health Savings Account contributions are not subject to federal taxes or often state taxes. These accounts provide a great way for individuals and families to cover health care expenses that they have to pay for out of their own pocket until their insurance deductible has been met.
Health Savings Accounts are only allowed in conjunction with a high-deductible health insurance plan (HDHP), which typically offers lower premiums than standard-deductible plans. The minimum deductible in 2010 and 2011 for an HDHP is $1,200 for individual coverage and $2,400 for family coverage. Out-of-pocket expenses are limited to $5,950 for individual coverage and to $11,900 for family coverage.
Like IRA accounts, you can contribute to a Health Savings Account (HSA) through April 15th of the next calendar year. In 2010 and 2011, individuals may contribute up to $3,050 and families may contribute up to $6,150. If an individual or the owner of a family HSA is at least 55, he can also contribute an additional $1,000.
The biggest change to Health Savings Accounts from healthcare reform lies in the penalties for withdrawing funds for non-qualified medical expenses. Such distributions are considered part of your gross income and, if you are under 65, you will be subject to a 20-percent penalty as of 2011.
In addition, over-the-counter medicines will no longer be considered HSA qualified expenses. Only insulin and prescribed drugs will be considered reimbursable. You can learn more about how to set up and maintain your tax-advantaged HSA on our website, or arrange for a confidential no-cost consultation by calling HSA for America at 866 749-2039.
Posted by Wiley Long at 03:54 AM | Comments (0)
October 04, 2010
Health Savings Accounts Are Still Popular With Health Care Reform
With health care reform pushing employers to cover their workers with health insurance, Health Savings Accounts are attracting new interest. The HSA Bank of Wisconsin and UMB Financial Corp. in Missouri report increased interest among employers.
Until health care reform was actually signed into law, many employers were waiting to see how Health Savings Accounts would fare. It now appears that these accounts will remain viable options with valuable advantages. A UMB representative predicts growth rates of 30 to 35 percent for UMB's Health Savings Account business.
Between June 2009 and May 2010, HSA Bank's account total grew by 51,000. By the end of May in 2009, HSA Bank held $905 million in 311,000 health savings accounts. And, there's even more growth potential now that health care reform is adding preventive medical care to high-deductible health insurance plans independent of the deductible.
With an estimated 32 million more Americans expected to take advantage of state health insurance exchanges in 2014, financial institutions are moving toward partnerships with insurers to promote Health Savings Accounts.
You can learn more about Health Savings Accounts through our website on combining a Health Savings Account with a high-deductible HSA health insurance plan. See how the experts make the most of Health Savings Accounts.
Posted by Wiley Long at 10:36 AM | Comments (0)