« What Do Health Savings Account Plans Mean For Preventive Care? | Main | Health Savings Accounts May Increase With Health Care Reform »
May 13, 2011
Health Savings Accounts Make Their Case
Proponents say that only Health Savings Accounts separate health care from insurance. For example, say you have family coverage through work that costs the employer $12,000 annually. If your employer pays for all the premiums and you have $25 co-pays to see a doctor, your expense is limited.
In contrast, if your employer still spends $12,000 a year, but puts $5,000 of it into a Health Savings Account (HSA) in your name, $5,000 of your health care benefit is now legally yours. Instead of a co-pay plan, your employer must buy a High-deductible Health Plan that's qualified to work with an HSA.
Preventive care is 100-percent covered, but you'll have to pay for other services until the deductible has been met. Any Health Savings Account funds you don't spend on health care are yours to keep. That's distinctly different from Flexible Spending Accounts, which are “use it or lose it” at the end of the year.
Each year, your employer contributes $5,000 to your HSA. As long as your health remains good, the balance in the HSA account can grow with tax-free earnings. It's yours to keep if you change employers or retire.
Posted by Wiley Long at May 13, 2011 09:50 AM