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June 17, 2011
Who Needs A Health Savings Account?
With the rising cost of health care, who wouldn’t want to cut down their health insurance premiums? That is why a lot of people are switching to high-deductible insurance plans and combining them with a Health Savings Account. The high-deductible insurance plans that are combined with an Health Savings Account typically cost less in monthly premiums than full-coverage plans. People with a health savings account have been able to reduce their premiums by as much as 40 percent, but that's not all an Health Savings Account can do.
A Health Savings Account (HSA) also lets investors save tax-free and withdraw to pay for health care without losing that tax-free advantage. You still don't need to pay taxes on funds taken from your HSA to pay for qualified health care expenses. In addition to interest-bearing savings accounts, you may also invest HSA money in bonds, mutual funds or stocks.
To be eligible to start an HSA, you need to have an insurance plan with a deductible of at least $1,150 for individual coverage or at least $2,300 for family coverage. Not all high-deductible plans let you open an HSA so be sure to get the right kind. Even though you have a high deductible on your plan, policies purchased after health care reform pay for preventive care completely. That means no co-pay, co-insurance or deductible.
To get all of these advantages, simply sign up for an HSA-compatible health insurance plan and choose a financial institution to administer your HSA. We have lots of valuable educational resources you can review to decide whether an HSA will work for you.
Posted by Wiley Long at June 17, 2011 08:47 AM