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May 04, 2011
Is A Health Savings Account The Same As A 501(c)3?
If you are wondering if Health Savings Accounts are the same as 501(c)3 corporations, then the answer is no. A 501(c)3 corporation is a tax-exempt organization formed for the purpose of educational or charitable activities. Health Savings Accounts, on the other hand, are simply a tax-advantaged way of saving money when it comes to paying for future medical bills.
A Health Savings Account basically helps reduce your income taxes - both federal and almost always state taxes. Contributions placed in your HSA are tax-deferred and withdrawals are tax-free when used to pay for qualified medical expenses. A 20-percent penalty may apply if you use the money for other purposes.
A health saving account must be combined with a qualified high-deductible health plan. These high deductibles start at $1,200 for individual coverage and $2,400 for family coverage. However, you must take note that HSA plans also have underwriting policies. Having pre-existing health conditions might cause your application to be denied. Our independent agents can suggest which companies have less strict underwriting policies to help you find coverage.
While rates for HSA-qualified plans are generally lower than standard co-pay plan premiums, your premiums will still be subject to rate increases. Maintaining your health will make it easier for you to switch plans when this occurs. We make it even easier by providing you with instant quotes from different well-known insurance companies that offer HSA plans.
Posted by Wiley Long at May 4, 2011 10:11 AM