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Health Savings Account (HSA) Insurance
The practical definition of an HSA, or Health Savings Account, is that
it pairs a high-deductible insurance plan with a tax-free savings account
that the insured can use for health expenses or save for a later date
or retirement. Introduced in January 2004, these plans are a departure
from traditional managed care plans and have some very distinct differences.
Many people today are asking the question “Is the new HSA healthcare
revolution for me?”
Here is a sample of potential HSA plan advantages:
- Consumers can make pre-tax contributions to cover healthcare costs.
- Contributions can be invested, and earnings will be tax deferred,
much like an IRA.
- HSA money can be rolled over from year-to-year, potentially building
up thousands of dollars over time.
- Withdrawals for medical expenses are tax-free. Withdrawals
in retirement are penalty-free.
- HSAs come with “catch up” provisions allowing people
older than 55 to contribute even more.
- HSAs are no longer limited to small businesses. Anyone can potentially
be eligible.
- The accounts are portable and can be transferred from job-to-job.
- Family plans have only one annual deductible to satisfy.
Health Savings Account (HSA) Insurance Trends
Proponents believe HSAs can revolutionize healthcare, and even play
a role in bringing down medical inflation. They predict large employer-sponsored
plans will offer these benefits to their employees, supplementing a growing
number of self-employed and small-business owners who have already switched to them.
If done right, they can help you build up a large sum of tax-advantaged
money that may help you survive a looming crisis in the retiree medical
system.
As our longevity increases, and because medical coverage is getting harder to find, workers and retirees will face a rising need
for money to pay for their healthcare. If medical inflation continues
at its current rapid pace, prospects for future retirees may even get
worse. As Medicare comes under severe financial pressure to reduce costs,
and with fewer large employers offering retiree benefits, HSA plans have
become a new avenue for consumers to create a nest egg to cover their
future healthcare needs.
Health Savings Account (HSA) Insurance Plan Options
Typical plan options:
- High Deductible Plans – Not just any health
insurance policy will qualify as an HSA. Each year, individual and family
plan deductibles are set at a minimum and maximum amount. The policy
cannot offer “first dollar” coverage benefits. In other words,
a high-deductible policy cannot offer co-payments for doctor visits.
Instead, those costs count towards your annual deductible which
is an out-of-pocket expense to you.
Although a Health Savings Account (HSA) may not be the ideal choice
for everyone, the majority of consumers will benefit from these plans.
If you value the annual premium savings they offer and have the discipline
to systemically invest in a savings account, then an HSA plan may be right
for you.
Health Savings Account (HSA) Insurance
Who should consider a Health Savings Account (HSA) plan? Anyone
who does not have Health Insurance or individuals who have coverage
but want to convert to a policy that has an investment account component.
Applicants should be in relatively good health and must be able to
budget a sensible amount towards the plan’s cost. A wide-range of
benefit options and affordable plan premiums are available from leading
companies such as HumanaOne, Blue Cross Blue Shield, United Healthcare,
Aetna, Assurant and Celtic (certain plans may not be available in
all areas).
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