Fort
Collins, CO (PRWEB) June 12, 2008 -- The IRS and Department of Treasury have
elevated the ceiling for contributions to tax-deductible health
savings accounts.
By
increasing maximum HSA contributions for 2009, the IRS and Department of Treasury
has made it more attractive for individuals and employers to consider health
savings accounts (HSA) when looking at health insurance options.
Money contributed to an HSA is tax-deductible, and can be used to pay qualified
medical expenses tax-free.
The
contribution limit has been raised to $3000 for individuals and $5950 for
families. This is up from 2008 limits of $2800 for individuals, and
$5800 for families. Individuals who are 55 or older are also allowed
to make up to an additional $1,000 a year in "catch up" contributions.
America's
Health Insurance Plans (AHIP) data shows that enrollment in high-deductible
health plans eligible to be tied with health savings accounts grew to 6.1
million in 2007, growing fastest in the small group market. According
to Wiley Long, president of HSA for America,
"The higher contribution limits make HSAs an even better value than before,
which will no doubt just accelerate the movement towards these types of plans.
Not only are HSA-qualified health insurance plans less expensive, but the
tax-deduction really makes them a no-brainer, particularly for people who
are paying for some or all of their own health insurance costs."
HSAs
are similar to Individual Retirement Accounts (IRAs). The account is
owned by the individual HSA holder, it is portable and is not dependent on
continued employment with a particular employer, and money in the account
grows tax-deferred. The big advantage over an IRA is that only with
an HSA can money can be withdrawn from the account tax-free to pay for qualified
medical expenses.
"Most
of our customers keep enough of their HSA money to cover their deductible
in an easily accessible savings account. As their savings grow, they'll
usually invest additional HSA funds in mutual funds or other investments with
larger growth potential", said Long.
Individuals
have until December 1 to obtain a qualifying high-deductible health plan in
2008 if they wish to take the deduction on 2008 taxes. Contributions
can be made as late as April 15th.
The
recent HSA contribution increases announced by the Internal Revenue Service
means that policy holders can get an even larger tax deduction when maximizing
their HSA contribution. This change will make these plans even more
attractive as millions of people continue to transition from conventional
co-pay health insurance plans, to high deductible HSA-qualified plans.
HSA
for America is one of the leading providers of health savings
accounts, health reimbursement accounts, and related information for employees
and small business owners across America. HSA accounts are an effective
way of saving money on healthcare costs and taxes and have an investment module
at the very same time. Learn more about Health Savings Accounts at our
free weekly teleseminar which you can sign up for at: http://www.health--savings--accounts.com/teleseminar.htm.
