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December 29, 2011
HSA Plans Added To Boston University’s Insurance Options
Next year will mark the first time that Health Savings Account plans will be offered to Boston University employees. Staff will still have access to two previous health insurance options (HMO and PPO plans), as well.
HSA plans will enable them to pay for certain medical care expenses not covered by insurance. If HSA funds are not needed for health care, the balance can grow with tax-free earnings to add to their retirement savings.
A Health Savings Account (HSA) must be linked with a qualified high-deductible health plan. Such a plan will cover major medical expenses once the deductible is met, but it will also pay for preventive care even before that.
The university HSA plans are offered through Blue Cross Blue Shield of Massachusetts. Generally speaking, the HSA option works best for healthy people who expect few medical bills. These plans do have some perks that everyone can use, though. For example, employees can use HSA tax-free dollars to pay for health care that's not covered by insurance, such as acupuncture or dental care. Further examples are available on our website.
Posted by Wiley Long at 11:56 AM | Comments (0)
December 25, 2011
How Health Savings Accounts Impact Consumers
According to the ACS 2011 Employer and Account Holder Survey, 77 percent of small employers say that high-deductible health plans paired with a Health Savings Account (HSA) help to control health care costs. More than half (56 percent) of HSA plan holders agreed that their HSA-qualified health plan was affordable.
Starting a HSA requires a very specific high-deductible insurance plan. These plan deductibles start at $1,200 for individuals or $2,400 for families, but not all plans that meet the criteria will work. Confirm a plan is HSA eligible up front.
Once you have a HSA-qualified high-deductible health plan, you can contribute up to $3,050 for self coverage or up to $6,150 for a family plan to your HSA. These contributions cannot only pay for health care, but can also serve as income tax deductions to lower your federal, and usually state, taxes.
Once your HSA has a reasonable balance, you can comfortably switch to health insurance with a higher deductible in exchange for lower premiums. You'll have your HSA balance to pay for unexpected bills until the plan's deductible is met. For more information on how to use HSA plans, please see our HSA Information page.
Posted by Wiley Long at 09:58 AM | Comments (0)
December 21, 2011
What Will Health Savings Account Limits Be In 2012?
The IRS has released contribution and other limits for Health Savings Accounts for 2012. Contributions increased slightly. For individual Health Savings Account (HSA) plans, annual contributions will be $50 higher at $3,100. Family HSA plan contributions will see a $100 increase to $6,250. The catch-up $1,000 contribution for those 55 or older remains unchanged.
Basically, a Health Savings Account is a tax-advantaged account that is linked with a HSA-qualified high-deductible health plan. You can set up a HSA with private insurance companies or financial institutions like banks.
Health Savings Accounts can be used to pay for qualified health care expenses with pretax money. Account money that's not needed for health expenses grows without being taxed and can help build savings for retirement.
After age 65, HSA funds may be spent for things other than health care without incurring a penalty. Until age 65, HSA owners face a 20-percent penalty for using HSA money for any purchase besides qualified health care.
HSA annual contributions can be made by you or your employer. Even if you leave the job, you get to keep your employer's contributions. The earnings that you get from your HSA assets are not taxed, either.
Next year, HSA-qualified health plans must have a deductible of not less than $1,200 for individuals or $2,400 for families. Even though a plan may fall within this range, the insurance company must agree to report to the IRS in order for the plan to be qualified to work with a HSA.
HSA plans also have limits on how much you can end up spending "out-of-pocket" per year for medical care that’s not covered by insurance. In 2012, that maximum is $6,050 for individuals and $12,100 for families. These numbers are not changing from 2011. To learn more about HSA plans, you can use our free HSA Webinar.
Posted by Wiley Long at 11:58 AM | Comments (0)
December 17, 2011
Benefits of Health Savings Accounts
Since the inception of Health Savings Accounts, a lot of people with high-deductible health plans have chosen this option. In fact, there's been a consistent increase in the number of people starting a Health Savings Account (HSA) each year.
If you are in a high tax bracket, you can definitely benefit from an HSA plan. You can lower your federal income taxes, and even your state income taxes in almost any state, via HSA contributions. You don't even need to itemize deductions because HSA contributions are considered "above the line" deductions.
Health Savings Account funds may be spent on qualified medical expenses ranging from acupuncture to your childrens' dental care. HSA investment options vary as well. You can invest your HSA funds with as little or as much risk as you're comfortable. Investments can range from interest-bearing savings accounts to stocks and bonds.
Even though a high-deductible health plan is required to start a HSA, these plans do limit your out-of-pocket expenses. The cap on out-of-pocket costs this year is $5,950 for self coverage and $11,900 for family coverage. Next year, that maximum will be $6,050 / $12,100. To learn more, take advantage of our free HSA Webinar. You can register right on our site.
Posted by Wiley Long at 09:57 AM | Comments (0)
December 13, 2011
Do Health Savings Accounts Work With a Health Reimbursement Arrangement?
Health Savings Accounts are allowed with Health Reimbursement Arrangements as long as the HRA does not reimburse expenses that would otherwise go toward the deductible of the HSA-qualified health insurance plan.
When there is an employer/employee business relationship, such as your spouse works at least part-time in the business, you can set up a Health Reimbursement Arrangement so that your business can reimburse you for health insurance and other health care expenses.
Otherwise, medical expenses are only deductible to the degree that they exceed 7.5 percent of your adjusted gross income (AGI). For example, if your AGI is $80,000 and you have $8,000 in medical expenses, you’ll only be able to deduct $2,000.
Establishing a HRA makes the entire $8,000 deductible as a business expense. You can see how this could save you thousands of dollars.
More information and an online process to establish your HRA right away is available on our Health Reimbursement Arrangements page.
Posted by Wiley Long at 11:56 AM | Comments (0)
December 09, 2011
Health Savings Account Bill Dies For Texas State Employees
In Texas, a House Bill was proposed to offer Health Savings Accounts to state workers. Political opposition makes it unlikely that this unique form of savings will be available for state employees, though.
A Health Savings Account (HSA) works in combination with a type of insurance that is typically less expensive than full-coverage health insurance. HSA-qualified plans would allow state employees to start their own HSA to cover health care expenses until the plan's annual deductible has been met.
The deductible would not have to be met before common preventive health care services were covered, but a deductible would be applied to any other type of medical care. That's where the Health Savings Account would be needed.
Although called Health Savings Accounts, HSA dollars can be invested in more than interest-bearing accounts. HSA administrators offer investment options ranging from stocks and bonds to mutual funds. All such investments grow with tax-free earnings. Further information on HSA-qualified high-deductible health plans is available on our website.
Posted by Wiley Long at 10:53 AM | Comments (0)
December 05, 2011
Health Savings Account Versus Retirement Account
Health Savings Accounts are usually recommended for tax deductions. The high-deductible health plans that work with them are commonly known for low premiums, as well, but another advantage is less well known.
Health Savings Accounts have a lot in common with IRAs, such as annual contributions can grow with tax-free earnings. Those contributions are also tax deductions. One difference between the two is that HSA money is always available to pay for personal or family health care, while IRA money is only available after you are 59-and-a-half.
You can get a larger tax deduction with an IRA, but Health Savings Accounts permit many investment options similar to IRAs, like bonds, mutual funds and stocks. An important difference between an HSA and an IRA is that HSA investments can be left in place long after you retire.
With the ever-growing cost of medical intervention, Health Savings Accounts fit modern needs with liquid assets readily available to cover health care for you and your family, while allowing you to build a retirement account at the same time. You'll find extensive resources here with us to explain how to make the most of your own Health Savings Account.
Posted by Wiley Long at 02:30 AM | Comments (0)
December 01, 2011
Difference Between Health Savings Accounts And A 501(C)3
If you are wondering if Health Savings Accounts are the same as 501(C)3 corporations, the answer is no. A 501(C)3 corporation is a tax-exempt organization formed for 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 medical bills.
A Health Savings Account also helps reduce your income taxes - both federal and almost always state taxes. HSA contributions tax-deferred and withdrawals are tax-free when used to pay for qualified medical expenses.
A Health Saving Account must be combined with a qualified high-deductible health plan. These deductibles start at $1,200 for individual coverage and $2,400 for family coverage.
HSA plans do have underwriting policies, so 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.
Rates for HSA-qualified plans are significantly lower than standard co-pay plan premiums. In addition, premiums have been rising only about half as fast as other kinds of health insurance.
Maintaining your health will make it easier for you to switch plans if you do see a rate increase. Our site offers instant quotes to help you compare prices from the major insurance companies offering HSA plans.
Posted by Wiley Long at 03:00 AM | Comments (0)