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Associations & Affinity Groups > HSA/HRA
 
Health Savings Accounts =
Lower Health Insurance Premiums +
Tax Advantaged Savings
 

By now, you’ve probably heard something about Health Savings Accounts (HSAs). With the cost of health insurance increasing at an alarming rate, consumers throughout the country are searching for lower-cost solutions. For many people, the best answer is an HSA. On this website, you will find the information needed to understand HSAs and help decide if the concept is right for your situation.

 

All The Details...

Step 1

Step 2

HSA ROAD RULES Get A Quote OPEN A NEW HSA ACCOUNT

 
HSAs are growing quickly...
 

First introduced in January 2004, HSAs have rapidly become one of the most popular health insurance options, especially among small businesses and the self-employed. Forrester Research projects that the number of HSA customers will top 6 million in 2008 and HSA plan assets will grow to $5 billion in four years.

     
HSA in a nutshell...
 

So, in a nutshell, what is an HSA? At its core, the concept is quite simple. Anyone who takes out a “qualifying high deductible health insurance policy 1” can also open a special tax-deferred savings account dedicated to health care expenses. Because it does not pay for routine medical expenses, a high deductible policy typically costs 20% to 40% less than traditional policies while still providing full coverage for catastrophic accidents or illnesses. The companion health savings account is used to pay, on a pre-tax basis, regular medical expenses which do not exceed the deductible.

     
A medical IRA...
 

HSAs have been called “Medical IRAs” by some proponents of the idea and it is easy to understand the basic concept by thinking of it that way. An HSA is treated, for tax purposes, much like an IRA:

  • the money you deposit in an HSA reduces your taxable income dollar-for-dollar;
  • interest earned by the HSA is not subject to current year taxation;
  • money paid out of the HSA for health care expenses is not taxed;
  • you can take money out for non-health care expenses but it becomes taxable income and is subject to a penalty.
     
Flexible Spending Accounts..
 

Another common comparison is to Flexible Spending Accounts (FSAs) which are a popular feature of many employer group benefit plans. “Use it or lose it” is how FSAs work. Any money left in your FSA account at year end is forfeited. Under an HSA, the opposite is true – any money left unspent remains in your account. In effect, HSAs are “use it or keep it”.

     
Pay yourself...
 

“Paying yourself” is also a good way to think about HSAs. Instead of forking over high premiums to the insurance coverage for very comprehensive coverage, consider paying part of that premium to yourself. That’s exactly what you are doing when you buy a lower-cost high deductible policy and redirect the savings in to your own Health Savings Account.

     
Is an HSA for me?
 

HSAs are not for everyone. You are probably a good candidate for an HSA, though, if you meet two tests:

  1. You are basically in good health, free of chronic conditions and generally only visit a doctor a few times a year for simple conditions like a cold, etc. and/or an annual physical, and
  2. You have the financial ability and discipline to fund the savings account.

If you’re interested in knowing more, please explore this website thoroughly and then request a quote. Or, if you prefer to discuss the subject with a qualified advisor, call 1-877-673-9797 between 8:30 AM and 5 PM (Eastern Time).

     
     
Qualified Policy
 

1To qualify as a high-deductible policy for purposes of an HSA in 2009-2010, the following are the requirements.

   

HDHP Minimum
Deductible Amount

2012

2013

Individual $1,200 $1,250
Family $2,400 $2,500

HDHP Maximum Out-of-Pocket Amount

   
Individual $6,050 $6,250
Family $12,100 $12,500

HSA Statutory Contribution Amount

   
Individual $3,100 $3,250
Family $6,250 $6,450

Catch-Up Contributions
(age 55 or older)  

$1,000 $1,000