Fort Collins, CO (PRWEB) December 13, 2006 -- Health
Savings Accounts (HSAs) received a boost this weekend when the U.S.
Congress gave final approval to H.R. 6111, the "Tax Relief and Health
Care Act of 2006". The additional incentives should greatly improve
the popularity of HSAs, particularly among individuals and families purchasing
their own health insurance, according to leading health insurance broker HSA
for America.
"HSA
plans are already the best health insurance value for just about anyone who
is paying for his or her own health insurance," said HSA for America President
Wiley Long. "They lower premiums, provide immediate tax reductions,
and make it easier to save for medical expenses during retirement. These
changes will result in HSA plans eclipsing co-pay plans as the primary choice
among small business owners, independent contractors, and anyone who's self-employed
or does not have employer-provided coverage."
Health
savings accounts are special tax-favored savings accounts that anyone with
a qualified high-deductible health insurance plan can open and fund.
Any money put in the account is tax deductible, and can be used tax-free to
pay for future medical expenses. If the money is not withdrawn, it continues
to grow tax-deferred like an IRA. HSAs first became available in January
2004, and today nearly five million people are covered by an HSA-qualified
health insurance plan.
Long
said the legislation contains several improvements to the already popular
HSA program that will make HSA plans the most popular type of coverage in
the near future.
- It
allows people to fund their HSAs with a one-time transfers from their Individual
Retirement Accounts (IRAs). Because funds withdrawn from an HSA to pay
medical expenses are never taxed, an HSA is a much more tax-advantaged investment
than an IRA. This provision will enable someone to quickly maximize
their contribution, so that they can fully cover the deductible on their high-deductible
health insurance plan.
- The bill allows individuals with HSA-qualified policies to contribute up to the annual contribution limit ($2,850 for individual coverage and $5,650 for family coverage in 2007), even if their deductible is less than this amount. Until now, policyholders with smaller deductibles were penalized because they were not allowed the same tax benefits as those with larger deductibles.
- Allows individuals to make the maximum contribution to
the HSA, regardless of when the HSA plan began. Taxpayers who purchase
an HSA plan later in the year will still be allowed to make the full HSA contribution,
instead of a pro-rated portion as is currently the case. This will enable
them to completely cover their deductible with funds from the HSA if they
have some large medical bills, and also gives them the same tax benefits as
someone who purchased the plan earlier in the year.
"I
expect very few people will continue to purchase health insurance plans with
co-pays once they understand how easy and inexpensive these plans now are",
said Long. "HSA plans can already reduce a family's annual expenses
by several thousand dollars.
Long
says HSA for America, which markets
HSA-qualified plans to individuals and families, is currently expanding in
anticipation of a growing surge of interest in health savings accounts in
2007. "We've already had a lot of people calling us about these changes,
and have started hosting weekly teleseminars to share this information and
answer questions from curious consumers."
The
HSA for America teleseminar is
offered to registered participants at no charge. For more information,
visit our Health
Savings Account Teleseminar page.
About HSA for America
HSA for America is the nation's
leading independent health insurance firm specializing in individual and family
coverage that works with a Health Savings Account. Through our comprehensive
website we offer complete information on HSAs and qualifying health insurance
plans. We offer instant quotes, online health insurance applications,
and access to several banks that can act as an HSA
administrator for your account.
