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February 27, 2012
Health Savings Accounts Offer Critical Illness Coverage
Although high-deductible health insurance plans are popular, one of the reasons why there are still people who hesitate to enroll in Health Savings Account (HSA) plans is because of the high financial risk when you get sick. Yes, you get to pay much lower premiums every month but when you need extended medical attention, your out-of-pocket costs can reach several thousand dollars.
A critical illness can cause your medical bills to pile up because of the medical care, medications and laboratory tests that you will need. Half of all bankruptcies are due to critical illnesses. And of those bankruptcies, 75% had health insurance. Did you know that you can add a Critical Illness policy to your high-deductible HSA plan?
Critical Illness coverage works by automatically paying $10,000 to $100,000, depending on the limit you select, if you are diagnosed with invasive cancer, end-stage renal failure, advanced Alzheimer’s disease, and a lot more. These conditions are payable only once, though.
You are free to use the money however you choose, including for investment into your Health Savings Account, co-pays and deductibles, out-of-network charges on PPO plans, lost income and monthly bills.
Critical Illness Insurance helps to fill the financial gaps not covered by traditional disability, accident, health, and life insurance. Adding a critical illness plan with an HSA plan can give you financial security and greater peace of mind.
Posted by Wiley Long at 07:44 AM | Comments (0)
February 22, 2012
Health Savings Accounts Continue to Grow in Assets and Numbers
Health Savings Accounts continued to grow in 2011, increasing to $12.4 billion in assets among 8.4 million Health Savings Accounts, according to the latest survey by Mathew Greenwald & Associates (MGA) and the nonpartisan Employee Benefit Research Institute (EBRI). That’s up more than 55 percent in the number of Health Savings Accounts and almost 70 percent in assets since 2010.
This growth comes after a leveling-off of Health Savings Account (HSA) balances during the recession years of 2008 and 2009, and a slight decline in 2010. The average HSA balance was $1,490 in 2011,
up 9 percent from 2010.
These and other findings are based on the results of the 2011 EBRI/MGA Consumer Engagement in Health Care Survey, published in the January 2012 EBRI Issue Brief, “Health Savings Accounts and Health Reimbursement Arrangements: Assets, Account Balances, and Rollovers, 2006–2011,” online at www.ebri.org
Employers first started offering HSA plans in 2001, when a handful of employers began to offer health reimbursement arrangements (HRAs), employer-funded health plans that reimburse workers for qualified medical expenses. In 2004, employers were able to start offering health plans with Health Savings Accounts (HSAs), tax-exempt trusts or custodial accounts that individuals can use to pay for health care expenses. The theory behind these Health Savings Accounts is that by giving individuals more control over funds allocated for health care services, they will spend the money more responsibly, especially once they become more educated about the actual price of health services.
The EBRI report notes that by 2010, 16 percent of employers with under 500 workers and 23 percent of those with 500 or more workers offered either an HRA or HSA-eligible plan. As a result, these HSA plans covered about 21 million people in 2011, representing about 12 percent of the privately insured market.
“As the number of people with Health Savings Accounts grows, total assets in HSA plans can be expected to grow as well,” said Paul Fronstin, director of EBRI’s Health Research and Education
Program and author of the report.
Other findings in the EBRI/MGA survey on Health Savings Accounts:
HSA Account Rollovers Increase: After declining to $1,029 in 2010, the average amount being rolled over from one year to the next increased to $1,208 in 2011. Total assets being rolled over increased as well: $6.7 billion was rolled over in 2011, up from $3.7 billion in 2010.
Differences in HSA Rollover Amounts: Men rolled over more money than women, and older individuals had higher rollover amounts than younger individuals. Rollover amounts increased with household income and education, and individuals with single coverage rolled over a slightly higher amount than those with family coverage.
Healthy Behavior Does Not Mean Higher HSA Account Balances: Individuals who smoke have more money in their Health Savings Accounts than those who do not smoke. In contrast, obese individuals have less money in their Health Savings Accounts than the non-obese. There is very little difference in Health Savings Account balances by level of exercise. Very small differences were found in Health Savings Account balances and rollover amounts between individuals who used cost or quality information, compared with those who did not use such information. However, next to no relationship was found between either Health Savings Account balance or rollover amounts and various cost-conscious behaviors. When a difference was found, those exhibiting the cost-conscious behavior were found to have lower HSA balances and rollover amounts.
The Employee Benefit Research Institute is a private, nonprofit research institute based in Washington, DC, that focuses on health, savings, retirement, and economic security issues. EBRI does not lobby and does not take policy positions.
Posted by Wiley Long at 12:29 PM | Comments (0)
February 19, 2012
How Health Savings Accounts Provide Health Care Solutions
If you have lost your employer-provided group health insurance, have noticed that health insurance premiums are on the rise again, or wished that you could control your healthcare costs, a Health Savings Account (HSA) could be exactly what you need.
Health Savings Accounts give you independence from employer-sponsored coverage, and options to help decrease premiums. They also offer you more choice in how you manage your healthcare costs. Certain high-deductible health plans allow you to combine them with a tax-advantaged HSA.
When you’re relatively healthy, a high-deductible health plan could be your best bet. Plans purchased after the Affordable Care Act was signed into law fully cover preventive care services through in-network providers even before you meet your plans’ deductible.
Preventive care includes vaccinations for influenza, annual checkups, and screening procedures for cancer, diabetes, high blood pressure, heart disease and more. If some healthcare services are not covered, you can probably withdraw HSA funds tax-free to cover them. For over-the-counter medications, you need a prescription to make them a qualified HSA expense.
Health Savings Accounts Can Increase Access To Health Care
If you are fond of alternative healthcare therapies not covered under your health insurance, you can use your HSA money to fund these services tax-free.
You can use HSA dollars to pay for acupuncture, aromatherapy, Ayurvedic Medicine, chiropractor services, Christian Science Practitioners, homeopathy, hydrotherapy, medical massage, nutritional counseling, or Traditional Chinese Medicine. You may also pay for qualified long-term care insurance with your Health Savings Account.
Recently, The National Institutes of Health acknowledged the advantages of alternative healthcare. With the demand increasing, more healthcare providers are offering these services.
An HSA Is Independent Of Employment
Unlike a FSA (Flexible Spending Account) that your employer can take back at the end of the year, an HSA is yours to keep even if you decide to quit your job. The funds roll over year after year and continue to grow tax-free. You don’t even have to itemize your deductions for your HSA contributions.
Even though you own your HSA, your employer can make contributions. In fact, contributions can come from other people in addition to your employer.
Once you reach retirement age, you can continue to withdraw funds from your HSA, but you are not allowed to make any more contributions.
HSA Plans Maximize Your Healthcare Savings
Regardless of how many years you use the benefits of a HSA, your high-deductible health plan will likely run you less in premiums than typical plans with lower deductibles. As long as you buy a plan after health care reform, you’ll have access to 100-percent coverage on preventive care services through in-network providers.
Posted by Wiley Long at 11:28 AM | Comments (0)
February 16, 2012
Health Savings Accounts Favored By Employers And Employees
With the skyrocketing costs of health care, businesses are trading their PPO (Preferred Provider Organization) plans in for Health Savings Accounts. This move is strongly favored by employees because it can mean quality healthcare coverage and tax deductions.
While the tax deduction for Health Savings Account contributions can be up to $3,050 for individuals and $6,150 for families in 2012, Golden Rule points out that HSA advantages go far beyond tax deductions.
Health Savings Accounts' Two Main Advantages:
For Golden Rule, Health Savings Accounts have two advantages. They are tax-privileged and they allow you to get lower health insurance premiums with a qualified high-deductible health plan. Plus, preventive care is 100-percent covered in plans obtained post health care reform through in-network providers.
One of the best things about having an HSA plan is that it allows you to keep more of your money in your own account than in Uncle Sam’s or in your insurer’s.
According to Richard A. Collins, CEO of UnitedHealthcare’s Golden Rule Insurance Company, Health Savings Accounts make financial sense fοr many families because thеу mаkе it possible to save tax free fοr medical expenses. He also says that since you - not your employer - own your HSA, you have the power to do what you want with the money when you want to use it.
Research conducted by RAND Health Insurance Experiment revealed that Health Savings Accounts change the way people handle their medical care. The consumer choice aspect of HSA plans can save money on both ends of the healthcare spectrum.
The study showed that HSA plan holders were able to cut their healthcare expenses, even when they seek medical treatment. This could be because consumers make better decisions regarding their healthcare. The study also revealed that 65 percent of the decrease in healthcare costs was from consumers “initiating care less often.”
Amelia Haviland, a RAND statistician, says that unlike earlier time periods, it seems that today’s patrons саn shape thе level аnԁ mix of medical services provided when they receive medical care. At nominal amounts, part of thе savings reflects choices fοr less-costly treatments, nοt јυѕt a reduction іn thе number of services.
According to Haviland, a couple of things help reduce rising healthcare costs. These are less use of name-brand medications and specialists. With Health Savings Accounts, the solution to control high healthcare costs might just be right under your nose.
Posted by Wiley Long at 11:25 AM | Comments (0)
February 13, 2012
Will Health Savings Accounts Be Affected By The Affordable Care Act?
Over the last year, the Affordable Care Act has dominated the headlines. Health care reform has included some changes to Health Savings Accounts and the health plans that work with them.
If purchased after Sept. 22, 2010, high-deductible health plans that are required to start a Health Savings Account (HSA) cover preventive health care before the deductible is met. They won't impose co-pay or co-insurance charges, either.
Consumers can no longer use their Health Savings Account funds to pay for over-the-counter medication unless they can get a prescription from their doctor. In addition, the penalty for using a HSA for non-qualified expenses has increased from 10 to 20 percent of the amount spent.
With these changes, 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 provide a high-deductible, low-premium option along with savings that are not taxed while in the account. They also offer significant tax deductions.
If you decide to learn more about Health Savings Accounts, we've put together information about how you can spend your HSA funds, how simple it is to lower your taxable income with them and much more.
Posted by Wiley Long at 08:39 AM | Comments (0)
February 09, 2012
Health Savings Accounts Secret To Medical Savings
Since the release of Health Savings Accounts in 2004, they has become a popular option. However, even though they’re very popular, a lot of people don’t realize that it can help lower skyrocketing health insurance costs. See how Health Savings Accounts can help improve your financial situation:
HSA plans help lower your health insurance cost. Generally, to set up an HSA, you need a qualified high-deductible health plan (HDHP). HDHPs give you premiums as low as 40 percent compared to co-pay plans.
Premiums are lower in health insurance plans with high deductibles because you are handling higher cost sharing responsibilities than the insurance company.
HSA plans give you tax savings. Once you have your HSA in place, you can start funding your savings account. You can allow your balance to grow with tax free earnings so you can pay for future medical expenses. You can pay for most of your medical, dental, vision expenses, and more tax free, through your HSA.
Lastly, when you have an HSA plan, you get control over your own healthcare. Nowadays, consumer driven healthcare is becoming more and more accepted as a solution to combat increasing health care costs. With the tax savings and low premiums that an HSA high-deductible plan gives you, makes the deal sweeter.
Posted by Wiley Long at 10:16 AM | Comments (0)
February 05, 2012
Do Health Savings Accounts Satisfy Customers?
J.P. Morgan's Treasury Services business recently announced the results of its 2011 Health Savings Accounts (HSA) customer satisfaction survey.
According to the survey, nearly eight out of 10 HSA holders were “very satisfied” with their HSA. The results indicated that satisfaction increased among account holders who used their Health Savings Accounts more frequently and among longer-term account holders.
As for HSA education, more than 60 percent agreed that sample lists of qualified medical expenses was the most helpful resource followed by interactive tools, such as HSA calculators. Two out of three said that they were "very likely or likely" to recommend a HSA to a colleague, friend or family member.
Once you have a high-deductible health plan that is compatible to work with a HSA, you are eligible to open this type of savings account. HSA plans allow you to deposit tax-deductible funds that you can use to cover qualified medical costs until your deductible has been met. The money left in your account at the end of the year rolls over to the next year and keeps growing with tax-free earnings.
Consumers are getting a Health Savings Account because it helps reduce federal and state taxes in almost all states. Contributions placed in your HSA are tax-deferred and withdrawals are tax-free when used to pay for qualified medical bills.
Posted by Wiley Long at 10:56 AM
February 01, 2012
How A Health Savings Account Plan Can Offer You Tax Savings
The first couple months of the year are usually the time when most people look for ways to keep more money in your pocket with tax-saving strategies. However, if you have an high deductible health insurance plan with a Health Savings Account (HSA), you don’t have to stress yourself about the April 15 deadline.
It’s not too late to save on your 2011 taxes by depositing the maximum contribution into your Health Savings Account. You still have until April 15, 2012 to make a tax deductible contribution into your HSA of $3,050 for singles and $6,150 for families.
For those who are 55 and above, you are allowed to make an additional catch-up contribution of $1,000. Remember, contributions can be made by you or your employer. For 2012, the IRS increased the maximum HSA contribution for individuals by $50 and $100 for families.
With an HSA plan, you get to enjoy triple tax benefits. These are tax-free contributions, tax-free withdrawals on qualified medical expenses and tax-free interest earned on savings.
If made through an employer’s payroll deduction, contributions are deposited pretax. These can also be as above-the-line deduction at tax-time if you contribute using after-tax money. Again, withdrawals are tax-deferred as long as the funds are used to pay qualified medical expenses. Your Health Savings Account balance also rolls over every year just like an IRA.
If you decide to use your HSA money for other purposes aside from those listed as a qualified expense, a 20 percent penalty will be imposed with the exception for those age 65 or older.
To qualify for an HSA, you must have a minimum deductible of $1,200 for singles and $2,400 for families. The IRS decided to change the deductible for this year. This year, make it a point that you use Health Savings Accounts tax incentives to your advantage.
Posted by Wiley Long at 10:09 AM | Comments (0)