Many people are looking for a lower cost way to buy their health insurance. For long time traditional copay plans have been the staple of health care plans, however, these plans can be quite expensive.
There is a fairly new kind of health insurance plan that provides quality coverage at a lower cost. HSAs provide the consumer with significant tax savings AND more control over how they spend their health-care dollars.
The money you save in premium usually ranges from 30% to 50% compared to lower-deductible copay plans.
HSAs (Health Savings Accounts) provide you with a tax-advantaged method to pay for health care expenses and plan for retirement. The tax savings of an HSA can go a long ways towards supplementing your retirement funds.
How HSAs Work:
HSAs have two main parts: A HDHP (High Deductible Health Plan) and a Health Savings Account.
The way it works is quite simple:
The high deductible health plans usually come with 100% coinsurance. In this case, you pay nothing after the deductible is met. Some plans offer 80% coinsurance, which means you pay at a rate of 20% (up to a maximum out-of-pocket amount) after the deductible is met.
The money you save in premium can be deposited into a tax-favored account and later withdrawn to pay your health-care expenses. The HSA money can be used to pay for all qualified healthcare expenses, including medical, dental, vision and chiropractic. The money can also be used to meet your deductible.
You are in total control of how the money is spent. You or anyone else can contribute the money into your account.
No “Use or lose it”.
The money in your account can roll over year to year on a tax deferred basis. As long as you use your money to cover health care expenses, the money is NEVER TAXED. Since the average person will spend over $130,000 in healthcare expenses – in retirement alone – this represents a HUGE tax savings!
It works very much like an I.R.A. in that you can withdraw money after age 65 for ANY reason. Considering the fact that most people will spend over $100,000 in retirement for healthcare, it makes sense to use TAX-FREE money from an HSA.
We will help you choose the right HSA plan since they are not all alike. Although federal law requires minimum and maximum deductible amounts, there are still many differences among carriers and plans. We will show you how HSA plans compare to traditional copay plans – based on YOUR unique needs.
We will also help you choose the right administrator for your HSA funds. It is an easy process. You can put your money into an interest-bearing checking account or you can choose a full brokerage service.
For more details on how HSAs may benefit you, please Contact Us.
