Health Savings Accounts (HSA)

Health Savings Account Teleseminar - Friday, March 12th

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Health Savings Accounts are simple and easy to understand           

Health Savings Account is a tax-favored savings account combined with a qualifying high-deductible health insurance plan.  By allowing you to deposit tax-deductible funds into a health savings account that you can use to cover medical costs, Health Savings Accounts enable you to take control of your own health care decisions.  One of the key aspects to health savings accounts is a system that is responsive primarily to individual consumers, rather than to third-party payers. This concept is known as consumer driven health care.

First, you must have a high-deductible health insurance plan that qualifies to be partnered with a Health Savings Account.  These plans are available through various insurance companies, depending upon what part of the country you live.  The plans are all similar in the fact that they have deductibles between $1,200 and $5,950 for singles, and between $2,400 and $11,900 for families.

Once your insurance policy has become effective, you may begin to fund your Health Savings Account.

Health Savings Accounts allow you to legally avoid federal income tax by depositing up to $3,050 for singles or $6,150 for families, into your Health Savings Account.  Whatever you deposit into your account up to April 15, 2011 is an "above the line" tax deduction for your 2010 taxes, meaning you get a federal income tax deduction for money you put in even if you take the standard deduction and don’t itemize deductions.  If your employer makes a Health Savings Account contribution for you, it is “excluded” from income, and not subject to any income tax or FICA.  Either way, this will immediately reduce your federal income tax due for the year.  Most states also allow you to take a state income tax deduction for HSA contributions.  To see if your state offers tax deductions, please see our HSA State Income Tax page.

On this site you will find thorough information on Health Savings Accounts, HSA trustees and administrators, and instant quotes on available HSA-qualified high deductible health insurance plans.

Please note: To obtain the maximum tax benefit from your Health Savings Account in 2011 as well as lock in 2010 rates, you must have your HSA-qualified insurance plan effective no later than December 1st.

Health Savings Accounts in the News

A Health Savings Account Has Benefits Like an IRA
Health Savings Accounts offer a better way to manage health care costs with tax advantages that help you save. If you want coverage in case of a catastrophic major accident or illness that will leave you with overwhelming medical bills, a Health Savings Account is made for you. A Health Savings Account is often abbreviated as "HSA", but it's typically called a health IRA in the financial industry. That's because a HSA works much like an IRA (Individual Retirement Account). When you set up a free HSA, you buy a High Deductible Health Insurance policy. If the deductible is $1,200, you pay the first $1,200 in medical costs before your insurance begins to cover charges.

Health Savings Accounts Help If You Lose a Job or Retire
A Health Savings Account (HSA) can do more for you than help pay for health-care expenses with tax-free dollars. It also helps to bridge gaps in health insurance coverage if you lose your job, or when you retire. If you're under 65, you can open a free Health Savings Account when you buy a qualified high-deductible health insurance plan. You can keep your HSA even when you're covered with other insurance policies if you don't have medical expenses paid by both insurance and your HSA, called "double dipping."

Health Savings Accounts Are in Greater Demand Than Ever Before
Chase (the nation’s second largest bank) reported significant growth in Health Savings Accounts. Chase added 115,000 Health Savings Accounts, and $220 million in related deposits last year. That amounted to 500,000 Health Savings Account (HSA) owners with combined account balances of $740 million. So many people are saving with a HSA because they understand this offers a better way to pay for current health expenses, and save for future qualified medical costs. HSA contributions are tax-deductible, and earn tax-free interest. You can also make tax-free withdrawals from a HSA to pay for qualified medical expenses. A HSA also helps you save through the associated lower premiums of High Deductible Health Insurance.

Health Savings Accounts Can Lower Insurance Premiums
Health Savings Accounts offer tax deductions for medical expenses, but lower monthly premiums for health insurance may be the greatest advantage Health Savings Accounts offer. Premiums for group health insurance rose 9.6 percent last year, and more than 10 percent for each of the previous six years. Premiums for individual plans went up even more, while insurance premiums associated with Health Savings Accounts only rose a mere 3.4 percent last year. In fact, average premiums for High Deductible Health Insurance associated with a Health Savings Account (HSA) for individuals actually dropped 19.5 percent during the past two years.

Is a Flexible Spending Account as Good as a Health Savings Account?
While Flexible Spending Accounts and Health Savings Accounts have some similarities, they also have important differences. Health Savings Accounts offer greater control, and more benefits. While you own and control your Health Savings Account, a Flexible Spending Account is controlled by your employer. That means you lose all the money in your Flexible Spending Account if you leave that employer, but you can keep your investment in your Health Savings Account if you change jobs, become unemployed, or retire.

Blue Cross Blue Shield Banks on Health Savings Account Plans
Blue Cross Blue Shield members now have their own bank, but it won't help them if they're looking for an auto loan or a good rate on a CD. Blue Healthcare Bank's sole purpose is handling health care-related banking services, such as Health Savings Accounts. The bank is being set up by the Blue Cross and Blue Shield Association members, including Blue Cross of Idaho, one of the first four members to work with the bank.

J.P. Morgan Shares Best Practices for Implementing a Health Savings Account Program (Business Wire via Yahoo! Finance)
NEW YORK----J.P. Morgan today issued a report titled "Best Practices for Implementing a Health Savings Account Program" providing a step-by-step guide for employers who want to offer an HSA program to employees.

Only 59% Aware of Health Savings Accounts (Financial Planning.com)
Six years after health savings accounts were introduced, only 59% of the population has heard of them, only half of these people actually understand them, and only 14% of the overall population own them, Guardian Life Insurance found in its Spotlight on Consumer-Driven Health Plans Survey.

Guardian Survey Reveals Widespread Lack of Understanding of Health Savings Accounts (redOrbit)
National Study by Guardian Life Insurance Identifies Key Motivators for Participation NEW YORK, June 3 /PRNewswire/ -- The Guardian Life Insurance Company of America (Guardian), a leading provider of employee benefits for small and mid-sized companies, today announced the results of a comprehensive survey on consumers' attitudes and beliefs regarding healthcare coverage, including health savings ...

Sterling HSA and Medical Cost Advocate Announce Partnership to Help Lower Consumer Healthcare Costs (dBusinessNews.com)
Oakland, CA and Wyckoff, NJ, June 2, 2009 – Sterling HSA Ò , a company specializing in administering health savings accounts (HSAs) and Medical Cost Advocate Ò , a company with expertise in negotiating health care costs for consumers, have teamed up to provide Sterling HSA account holders with a service to review and negotiate their out-of-pocket medical expenses as another way of advancing ...

What You Should Know About Health Savings Accounts (PRWeb)
Health Savings Accounts (HSAs) were created to help individuals and families prepare for medical expenses and gain a tax advantage in the process. The Federation of American Consumers and Travelers (FACT) has compiled information from a variety of sources in order to help its members, and the public at large, to know whether an HSA is right for them. (PRWeb May 29, 2009) Read the full story at ...

Blue Cross Blue Shield Approved to Start Health Savings Account Bank
Blue Cross Blue Shield has received federal approval to establish a savings bank that will be allowed to administer Health Savings Accounts.  Blue Cross Blue Shield said it had received assent from the Office of Thrift Supervision, a Treasury Department agency, to establish a federally insured savings bank to be based in Utah.  It will be called Blue Healthcare Bank.  Health Savings Accounts can be set up by consumers who have high-deductible insurance plans, and Blue Cross Blue Shield offers some of the most competitive HSA plans on the market.

Humana to Cap Health Savings Account Premiums for More Than One Year
After years of double-digit premium increases for employers providing health plans to workers, Humana and other insurers are trying a different approach: new health savings account plans that cap premium hikes at guaranteed low rates if buyers agree to a multiyear contract and workers absorb increases in deductibles.  Even doctors known to be skeptical of almost anything the health insurance industry suggests say they are intrigued with the health savings account idea - hoping it might be one remedy for unpredictable, rising health care costs.

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