Fort Collins, CO (PRWEB) December 19, 2006 -- The recently passed "Tax Relief
and Health Care Act of 2006" has several provisions that make it easier to
open and fund an HSA, including the option of a one-time tax-free rollover
from an IRA into the HSA. This change has already caused a great increase
in interest among the self-employed and other individuals who purchase their
own health insurance, according to leading health insurance broker HSA
for America.
"We're
getting a tremendous number of inquiries from people who want to know how
they can fund their account with money from their IRA," said HSA
for America President Wiley Long. "HSA-qualified health
insurance plans have high deductibles of $1,100 or more. By doing a
tax-free rollover from their IRA, individuals can immediately fund their account
so that the deductible can be covered 100%. That basically removes the
risk of going with a high-deductible plan."
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 If the money is not withdrawn, it continues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.
"HSA
plans have much lower premiums than traditional co-pay plans, but they do
have a higher deductible. Medical expenses that someone incurs before
they meet their deductible can be paid for from the HSA, but if they've just
opened their HSA they may not have had enough time to accumulate much money
in it. The tax-free IRA rollover solves that problem," said Long.
"I expect that by sometime in 2007 sales of HSA plans will eclipse co-pay
plans as the preferred type of health insurance among individuals purchasing
their own plans."
Both
IRAs and HSAs are special tax-favored accounts that can be funded with tax-free
money, and that grow tax-deferred. But HSAs have an additional tax advantage
over IRAs: if the money is withdrawn to pay for qualified medical expenses,
taxes never need to be paid on those funds. This makes HSAs a much preferred
way to save for future medical expenses, according to Long.
"According
to Fidelity Investments, the average couple retiring in 2006 will need $200,000
to cover medical expenses, not even counting dental, over-the-counter medications,
or long-term care. And that amount is going up every year. Those
who have an HSA could have thousands of additional dollars available to them
to cover these expenses in their retirement years."
To help
people who are buying their own health insurance understand these changes,
HSA for America is hosting weekly
teleseminars throughout the rest of 2006. "If someone can get their
coverage in place before December 31, they can lock in 2006 rates for the
next 6 - 24 months."
The
teleseminar is offered to registered participants at no charge. For
more information on the teleseminar and how to sign up, please 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.
