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Health Savings Accounts - HSAs
Posted at 9:06 pm | Filed Under Uncategorized
Around the country, millions of kids are getting their back-to-school physicals. But many of their parents also could benefit from a check-up — by checking into their health insurance coverage!
Taking your health insurance coverage for granted can cost your family thousands of dollars each year. A check-up can help you understand what you’re spending and, more importantly, what you could be saving if you switched to a high-deductible health plan with a health savings account (HSA). An HSA is a consumer-managed, tax-favored alternative to traditional health insurance, created for the purpose of paying medical expenses.
Health plans with HSAs offer protection and a tax-free way to invest — all at a cost that is usually less than what someone would pay for a traditional plan,. For families with about $1,500 in annual medical expenses, an HSA can often save them more than $6,000 a year.
Here are some tips for selecting an HSA provider:
— Work with a company that understands health insurance and has considerable experience with HSAs.
— Consider costs, interest rates and investment options.
— Look for a provider able to provide insurance plans, claims and HSA information in one comprehensive package.
HSAs were established in 2003 and already more than 6.1 million Americans have opened these accounts. Why are they so popular? Because an HSA can lower your premium costs and allow you to save money in a tax-free account, like an IRA, to pay for routine medical expenses. For 2008, you are allowed to contribute up to $2,900 a year for an individual account and $5,800 for families. These contributions can be deducted from your taxable income and you pay no tax on withdrawals for qualified medical expenses.
Another reason more people are selecting high deductible health plans with HSAs is to gain control over how their health care dollars are spent. For example, if you find a doctor who charges $50 less than others in your area for your child’s back-to-school physical, those savings accumulate in your account and earn tax-free interest.