« July 2011 | Main | September 2011 »
August 29, 2011
Is An HSA The Right Choice For You?
As employers are looking for ways to battle increasing health care costs, more and more are leaning towards the popular Health Savings Accounts. Since the inception of Health Savings Accounts in 2004, consumers have been drawn to them. In part, this is because they allow consumers to get tax deductions for savings for health care costs.
To set up a Health Savings Account, you need a high-deductible health plan that's qualified to work with a Health Savings Account (HSA). Any money left in your HSA at the end of the year rolls over every year unlike when you have money in a flexible spending account.
According to Nick Calabrese, the vice president of consumers and product management of CIGNA, HSA Plans are becoming more popular because they help manage costs without sacrificing health care. That's never been more true than after health care reform.
An HSA Plan purchased now will cover preventive health care before the deductible is met. Calabrese added that opting for an HSA is a matter of personal choice. It's important to evaluate how much your out-of-pocket expense will be with each HSA Plan you consider. You can find out more about these plans with our educational online resources.
Posted by Wiley Long at 04:20 AM | Comments (0)
August 24, 2011
Health Savings Account Balances Blooming This Summer
Employers are leaning toward high-deductible health plans for employee benefits, and Health Savings Accounts (HSA) balances increased this June.
With the current recession, firms have reduced their workforce and the benefits they offer employees. Some companies have been able to maintain health benefits for workers via high-deductible plans combined with Health Savings Account. Commonly known as an HSA, this form of savings account offers tax-advantages in exchange for saving to cover medical costs.
According to the Denevir Group, LLC, balances held in Health Savings Accounts increased to $11.7 billion this summer, which is a 31-percent increase over last year. Likewise, the total number of Health Savings Accounts jumped another 28 percent from the same time last year. That resulted in approximately 6.3 million Health Savings Accounts.
Last year, the average HSA balance was around $1,640. This year it's climbed to $1,845. Total HSA assets are expected to reach $13.4 billion by the end of this year.
Whether you’re a business owner or self-employed, investing in an HSA could save you money. Investing in HSA Plans can cut the cost of health care coverage, reduce taxes and give tax-free earnings. Consultations can be arranged to help you compare your HSA options.
Posted by Wiley Long at 10:32 AM | Comments (0)
August 21, 2011
2012 Health Savings Account Plan Minimums and Maximums
Each year, the IRS calculates annual Health Savings Account adjustments using a 12-month period ending March 31. It has released Revenue Procedure 2011-32,1 that shows inflation-adjusted amounts for 2012 Health Savings Accounts and the high-deductible health plans that work with them.
For 2012, the maximum annual HSA contribution for individual HSA plans will be $3,100, which is $50 higher than the 2011 maximum. For family HSA plans, the maximum will be $6,250, or $100 higher than in 2011.
Those 55 or over may contribute an additional $1,000 in 2012 just like in 2011. Both individuals and their employers may contribute to an HSA as long as the individual is covered under a high-deductible health plan.
The minimum high-deductible health plan deductible for HSA plans remains the same next year. That's $1,200 for individual coverage or $2,400 for family coverage.
Maximum out-of-pocket expense will increase for 2012. For individual HSA plans, that will increase $100 to $6,050. For family HSA plans, it will increase to $12,100 (up $200 from 2011). The out-of-pocket expense does not include premiums. For more specifics on Health Savings Accounts and HSA Plans, you can use our online educational resources.
Posted by Wiley Long at 12:28 PM | Comments (0)
August 18, 2011
Arizona Offers HSA Plan Tax Credit On Health Insurance For Small Businesses
Arizona has a new law to motivate small businesses to help employees with health insurance. It offers firms dollar-for-dollar tax credit up to $360 a year on the purchase of high-deductible HSA plans and Health Savings Accounts.
There's an additional $360 credit for contributions the employer makes to a worker’s Health Savings Account. The credits are only available for three years, which may be all that is necessary.
Expressing the National Federation of Independent Business' support, director Farrell Quinlan says, “We believe these incentives will help provide probably one of the lowest-cost health care options with a Health Savings Account.”
High-deductible policies used to mainly provides coverage for catastrophic medical costs leaving beneficiaries to pay for medical expenses until the deductible was met. After health care reform, plans purchased now start coverage immediately for services termed recommended preventive health care. You can learn more about these plans by running instant quotes on our site.
Posted by Wiley Long at 10:03 AM | Comments (0)
August 15, 2011
How Health Savings Accounts Really Work
A Health Savings Account, commonly known as an HSA, adds tax advantages to certain health insurance plans that have deductibles. Like other high-deductible plans, those that allow you to open an HSA, typically have premiums in the least expensive range.
Like other deductible plans, HSA Plans cover 100 percent of your medical expenses once the total out-of-pocket limits are met (including the deductible). For 2011, annual out-of-pocket expenses are limited to $5,950 for individual coverage and to $11,900 for family coverage. The minimum deductible for an HSA-qualified plan is $1,200 for individual coverage and $2,400 for family coverage in 2011.
As soon as your HSA-qualified health plan is in effect, you can open an HSA. It's important to do that asap even if you only make a minimal deposit. Once you start an HSA, you can retroactively deposit funds to pay for previous medical expenses, but your HSA must have been open when you incurred the expense.
Some of the other benefits Health Savings Accounts offer include:
- Pre-tax contributions can reduce your taxable income
- After-tax contributions are tax deductible
- HSA contributions and earnings grow tax deferred
In 2011, you may contribute up to $3,050 for an individual HSA or up to $6,150 for a family HSA. If you are 55 or older, you're allowed to make an additional $1,000 contribution.
Whatever you contribute may be used for qualified medical expenses without paying taxes on those funds. Any funds not needed for health care remain in your health savings account unlike flexible spending accounts, where unused funds are lost at the end of the year.
HSA funds remain your property when you leave a job even if the employer contributed to your HSA on your behalf. You also have control over how you invest the funds. You can choose from savings accounts, money market accounts, stocks, bonds, and mutual funds.
Before you turn 65, you'll get a 20-percent penalty if you use your HSA funds for anything other than qualified medical expenses. You'll also have to pay income taxes on those withdrawals. Once you're 65, you'll still have to pay taxes on HSA withdrawals, but there's no penalty. We've loaded our site with informational resources to help you decide whether an HSA is right for you.
Posted by Wiley Long at 07:59 AM | Comments (0)
August 09, 2011
Health Savings Accounts And What The Affordable Care Act Means For Them
Over the last few years, the Affordable Care Act has dominated the headlines. There has been much optimism about what healthcare reform can do to make health insurance and health care more affordable. Health care reform has included some changes to Health Savings Accounts and the health plans that work with them.
Consumers can no longer use their Health Savings Account (HSA) funds to pay for over-the-counter medication unless they can get a prescription from their doctor. In addition, the penalty for using your HSA for non-medical expenses has increased from 10 to 20 percent of the amount spent.
Despite these changes in Health Savings Accounts, many see HSA plans as a tool to encourage us to take a greater interest in managing the cost of our health care. HSA plans are intended to provide consumers with a high-deductible, low-premium coverage option along with the ability to save for health care expenses with earnings that are not subject to taxation.
To help you decide whether these special HSA plans can save you money, we've put together information about how you can spend your HSA funds, how simple it is to lower your taxable income with a Health Savings Account and much more. Check it out and give us a call if you have questions or would like help comparing your options.
Posted by Wiley Long at 08:03 AM | Comments (0)
August 03, 2011
Health Savings Accounts And The Reason Behind Their Popularity
The need to save for health care has never been more urgent. Perhaps, that's why more people are starting a Health Savings Account (HSA) and the amounts deposited in them are increasing. Just this year, an astounding 11.4 million people enrolled in a high-deductible health plan that allowed them to open an HSA.
The advantages of an HSA are only available to those who have a qualified high-deductible health plan, but these HSA plans offer other advantages, too.
Health Savings Account insurance plans are typically less expensive than full coverage plans, and the money saved on premiums can be invested in an HSA to cover expenses until the deductible is met. You won't need it for common preventive care, though. That's covered with no out-of-pocket costs regardless of the deductible.
An HSA can also get you tax deductions and build your savings (that can be invested in bonds, mutual funds or stocks) with tax-free earnings. Even after retirement, HSA funds can still be used for qualified health care on a tax-free basis. That can be a big help during retirement.
What’s even better is that HSA contributions are always yours to keep, even if your employer helps to fund your account. It doesn't matter whether you leave that job or retire. You always have control over how the funds are invested. Want to know more? Check out our free information on everything from how you can spend your HSA money to how to find an HSA administrator to set up your own tax-free savings account.
Posted by Wiley Long at 08:01 AM | Comments (0)
August 01, 2011
Enrollment In Health Savings Accounts Is Still On The Rise
According to the America’s Health Insurance Plan (AHIP), enrollment in a high-deductible health plan coupled with a Health Savings Account (HSA) increased by 14 percent this year. The biggest increase came from the large-group businesses, which rose by 26 percent from January 2010 to 2011.
If you’re a business owner, you should investigate how a health savings account can save you money even if you are self employed. If you have employees, an HSA Plan can mean big annual savings on the cost of health insurance benefits.
Your employees will need to start their own HSA, but we can recommend financial institutions that offer health savings accounts. HSA contributions are tax deductible. The maximum contribution allowed depends on whether you set up a family or individual plan.
Investing in HSA plans can cut the cost of health care coverage, reduce taxes and give tax-free earnings. That's why an HSA can benefit both employees and business owners. We've explained all the details here on our website, and have HSA experts ready to answer your questions. Just call to arrange for a free consultation at no charge.
Posted by Wiley Long at 07:59 AM | Comments (0)