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January 27, 2011
Health Savings Accounts Save Businesses Money
Can health savings accounts save you money as a business owner? Whether you are the only employee or you are providing health insurance for your employees, you can typically get lower rates with group plans than with individual plans. Group plans typically offer better coverage, too, and health savings accounts that work with group plans "sweeten the pot."
In addition to lower rates and better coverage through group plans, health savings accounts offer a couple more advantages. The set-up and management work for health savings accounts falls to the employees. That reduces paperwork for your business.
In exchange for doing Health Savings Account that work, employees can take tax deductions for their contributions into their health savings account. The maximize amount employees may contribute depends on their age and whether they set up a family or an individual account. The high-deductible health insurance plans that work with a health savings account, typically have lower premiums than full-coverage plans.
Health savings accounts can offer savings for both employers and employees. To see the options available to set up health savings accounts, just visit our website.
Posted by Wiley Long at 12:31 PM | Comments (0)
January 24, 2011
Health Savings Accounts And Health Reimbursement Arrangements
Are Health Savings Accounts different from Health Reimbursement Arrangements? Both are usually combined with a high-deductible health insurance plan, but there are significant differences that you'll want to understand.
Only the employer may fund an HRA plan, which cannot be funded by a salary reduction. Employers can deduct 100 percent of their contributions and the deposits are tax-free for employees.
In contrast, both the employer and employee can contribute to HSA Health Plans. HSA Plans have no minimum contribution requirement, but up to $3,050 may be deposited annually into an individual HSA. An HSA may also be established as a family account. In that case, up to $6,150 may be deposited. Those between 55 and 65 years of age are allowed to make "catch up" contributions of an additional $1,000 a year.
Whatever an employee contributes to an HSA by April 15th will be treated as an "above the line" deduction even if the employee doesn't itemize and takes the standard deduction.
Employers can also contribute to an employee's Health Savings Account. These contributions are "excluded" from the employee's income.
Ownership Issues
An HSA remains with the employee whether they are discharged, change jobs or retire. Employees manage which financial institution administers an HSA, how funds are invested and withdrawn. Withdrawals are allowed for a wide range of health care, but new laws exclude over-the-counter medicines like cold remedies. How HSA funds may be used is set by law.
Employers decide how Health Reimbursement Arrangements can be used and can offer limited or comprehensive options.
An HRA is under the employers control at the end of the plan year. The employer can keep any or all unused funds. HSA funds remain with the employee at the end of the year and roll over year after year to accumulate and grow with tax-free interest.
Retirement Options
If HSA withdrawals are made for non-qualified expenses prior to age 65, the law requires a 20-percent penalty and the withdrawal is taxable.
Turning 65 allows an HSA owner to use HSA funds without restrictions, but withdrawals for non-qualified health care are taxable. There is no requirement to begin withdrawing HSA funds at any particular age, unlike IRA requirements. Employers control whether funds remain with employees to be used for retirement. Learn more about HSA Plans on our website at: http://www.health--savings--accounts.com
Posted by Wiley Long at 10:11 AM | Comments (0)
January 19, 2011
Can A Health Savings Account Work For You?
When you're shopping for health insurance, a health savings account (HSA) offers several advantages that can save you more than typical plans.
There are two big benefits to HSA Plans. Since a Health Savings Account is combined with high-deductible health insurance, you can get lower premiums than with plans that have low deductibles. You can also grow your Health Savings Account balance in a tax-free way.
While you're building your savings with an HSA, you can accumulate the cash to pay for a high deductible if necessary, and the reduced premiums will help.
If you don't have to use your HSA to meet the deductible on your health insurance, this cash can grow tax free to be used for retirement. All the cash in your HSA when you turn 65 is yours to use as you see fit just like IRA funds.
To get both of these advantages, simply use a reputable insurance agent to sign up for an HSA-compatible health insurance plan and choose a financial institution to administer your HSA. Find out more about the benefits of HSA Plans on our website.
Posted by Wiley Long at 10:10 AM | Comments (0)
January 16, 2011
HSA Plans And HRAs Grow By 27 Percent
Health Savings Accounts and Consumer-directed Health Plans (CDHPs) offer greater control over health care expenses. That could be what is behind the rapid growth in popularity of these Health Savings Accounts, which had been set up by an estimated 23 million people in 2009. That was a 27 percent increase over 2008, according to Mercer’s National Survey of Employer Sponsored Health Plans by the American Association of Preferred Provider Organizations (AAPPO).
Karen Greenrose, the president and CEO of AAPPO, said, “We also saw small employers turn to CDHPs at a much greater rate, largely due to this cost savings. CDHPs, which are predominately built on PPO networks, offer the affordability, choice and access that employers and consumers alike are looking for.”
This analysis also indicated that employers prefer health savings accounts, but employees are enrolling in Health Reimbursement Accounts (HRAs) at a higher rate. HRAs require an employer contribution, but Health Savings Accounts allow contributions from both employers and employees.
Health Savings Accounts offer employees greater control over account balances. HRAs can be taken back by the employer at the plan's year-end, but HSA Plan funds roll over to the following year. Employees also retain these account balances if they lose their job, switch to a different job or retire.
Posted by Wiley Long at 11:02 AM | Comments (0)
January 13, 2011
Growth For Health Savings Accounts
Health Savings Accounts have grown by $8.6 billion since the 2003 law that spawned them. In contrast, retirement accounts like 401(k)s held $2.4 trillion when 2008 ended. Industry experts predict that Health Savings Account (HSA) assets will grow by $50 billion to $100 billion.
Employees are becoming more familiar with them and companies are embracing high-deductible plans to reduce spending. Wells Fargo and JPMorgan Chase now manage most of the Health Savings Account assets, and Vanguard Group and Fidelity Investments hold $250 million worth of these HSA funds.
Health Savings Accounts are favored by the wealthy as additional tax breaks beyond 401(k)s. Thirty percent of HSA owners deposit the maximum contribution allowed. That was $3,050 for individuals and $6,150 for families in 2010. According to Fidelity vice president Will Applegate, "People equate the Health Savings Accounts to an IRA."
Tax breaks are less helpful to people with low- and middle-level incomes. The Government Accountability Office's 2008 study revealed that almost half of the people with qualified high-deductible health insurance plans did not open an HSA and many said they could not afford to do so.
Studies show that HSA owners seek less health care to avoid spending a lot out-of-pocket. It's feared that can allow medical problems to become more serious resulting in greater loss of life and more expensive medical treatment. That applies to high-deductible health insurance plans that cannot be combined with an HSA, as well. To see whether HSA plans will work you, visit us online at http://www.health--savings--accounts.com
Posted by Wiley Long at 11:39 AM | Comments (0)
January 10, 2011
Health Savings Accounts Grow 30 Percent at Chase
At Chase, health savings accounts grew by 30 percent during a single year. More than 115,000 health savings accounts and $220 million in deposits were added, and Chase has more than 500,000 HSA owners holding a combined balance of $740 million.
This health savings account growth has been fueled by Chase's partnerships with national and regional HSA health insurance plans. These HSA programs are marketed directly to employers, ranging from Fortune 500 companies to small businesses.
To attract new health savings account customers, the managing director David Josephs says, Chase has been "Upgrading features such as online bill pay, automatic funds transfers for investing, and enhanced reporting for employers provides increased flexibility for account holders and clients."
Chase also developed a comprehensive "adoption" kit that companies can use to explain health savings accounts to employees, including suggestions for maximizing tax savings and negotiating federal and state tax requirements. Chase customers may log on to a secure website to move money directly from checking or savings accounts to contribute to their HSA. Health care expenses may also be paid online directly from their HSA. See more about how HSA plans work right here on our website.
Posted by Wiley Long at 01:28 AM | Comments (0)
January 05, 2011
Health Savings Accounts Manage Medical Expenses
If you're relatively healthy without a lot of medical costs and you're in a high tax bracket, a Health Savings Account can get you lower health insurance premiums and tax deductions for health care.
A Health Savings Account lets you earn interest tax free to save for future health-related expenses. That's how an Health Savings Account Plan lets you grow your balance quickly.
Any funds you don't use for qualified health care expenses roll over every year and are yours to keep independent of your employment. An Health Savings Account can also double as a retirement fund. Think of an Health Savings Account as a medical IRA.
The most important advantage of an Health Savings Account is that it makes health care expenses tax deductible. That's a big help when you're in a high tax bracket.
After you turn 65, you may withdraw funds from your Health Savings Account for any use at all. Until you are 65, if you make a withdrawal for anything other than a qualified medical expense, you'll have a 20 percent penalty and tax on the amount withdrawn.
A Health Savings Account only works with a high-deductible health insurance policy. These HSA Plans typically have lower premiums than full coverage insurance, and you may use your Health Savings Account to pay for your premiums.
Posted by Wiley Long at 11:18 AM | Comments (0)
January 01, 2011
Health Savings Accounts May Be Treated Differently In Wisconsin
Wisconsin is expected to join three states (Alabama, California and New Jersey) in considering employer contributions to Health Savings Accounts to be income. Neither the federal government nor 46 other states count such contributions as income.
The Legislature in Wisconsin has routinely passed bills that would bring Wisconsin more in line with other states, but Gov. Jim Doyle vetoed them. Senate Bill 452 that advances this Health Savings Account idea is controversial.
According to the Humana Health Insurance regional director of government relations Mary Haffenbredl, "This is so detrimental" to lower-income workers. For example, students get no financial aid or lower financial aid because they get bumped to the next income bracket."
Senate Bill 452 was authored by Democrats and eligibility is capped at 500 percent of the federal poverty level. That's around $54,000 for an individual or $110,000 for a family of four. You can learn more how health savings work on our website at: http://www.health--savings--accounts.com
Posted by Wiley Long at 10:00 AM | Comments (0)