An HSA is actually a consumer spending plan that is used for health care. It's a way for an individual to save for future health care costs while keeping the money available for emergencies today.
The way it works is that an individual and/or his employer can put a certain amount of money into the tax-favored Health Savings Account to save for future healthcare. There are certain amounts that you can save yearly, as follows:
* $3,000 per year in 2009 if you are single
* $5,950 per year in 2009 if you are a family, no matter what your family size.
If you are 55 or over, you can add $1,000 to these figures. This gives older employees an opportunity to "catch up" for the years they weren't able to save.
The HSA is only available if you are covered by a "Qualified High Deductible Health Plan."
The HSA can be helpful in multiple ways because it usually gives you more opportunities to use it than a regular healthcare plan does. For example, some of the HSA-included medical conditions (that may or may not be covered under a regular traditional healthcare plan) include:
* acupuncture,
* inpatient care for alcoholism and
* artificial teeth.
There are literally hundreds more procedures allowed under the HSA that make it substantially more valuable than the traditional health plan. This is one great reason to get an HSA plan started now.
Employers often use an HSA plan as an alternative to traditional HMO or PPO plans so that the employee has a wider range of coverage. Generally speaking, the HSA plan allows both the employee and the employer to make pre-tax contributions to the plan.
As a business owner, the HSA plan can be valuable to your business because it offers many benefits for you. Some of the benefits of these plans include:
* Your premiums are reduced -- this means you pay less for these plans when you switch over to them than you would with a traditional healthcare plan.
* Your renewal flexibility is better -- you have two contributions you can control: the health premium and the HSA fund portion. You can decide on each independently; they are then reviewed each year for any changes you may want to make.
* You can give more benefits to the employee -- You don't have to pay 100% of the insurance dollars to a carrier anymore because some of those dollars can go to the employee directly via his HSA when you fund this type of account.
An HSA account works effectively for both the employer and the employee and is one way to cut the rising costs of healthcare.
California health savings accounts have been in effect since 2003, yet many people still do not understand the benefits of these medical saving plans. Basically, California health savings accounts are part of the Medicare Prescription Drug, Improvement and Modernization Act. Yet unlike various California Medicare supplements, these accounts are intended solely for persons under the age of 65. Anyone in this age group who purchases qualifying High Deductible California Health Insurance Plans may open up their own health savings account, or HSA. What makes California health savings accounts different from other types of savings accounts is the fact that the money deposited is deducted from your taxable income. The tax benefits of California health savings account are abundant ? the deposits and earnings you make aren't taxed, there is no annual ?use it or lose it? qualifier, and money in the account is never taxed as long as you use it for qualified health expenses. This is not limited to doctor and hospital expenses, though. Vitamins, pain relievers, cold medicine and other simple over-the-counter products also qualify. California health insurance plans with higher deductibles that come with HSAs are much lower priced on a month-to-month basis than traditional Preferred Provider Organization and Health Maintenance Organization insurance plans (HMOs and PPOs). Although the deductibles are higher, the ability to set aside tax-free money offsets that potential expense. And the account is yours, so even if your employer was depositing money in your HSA and you leave the company, you still get to keep any money in the account that you hadn't used. Since California health savings accounts are so flexible they can be quite handy and they can definitely help protect you from life's unexpected emergencies. If you don't have health insurance, high deductible California health insurance plans with health savings accounts are worth considering.
Both James Edholm & Grojan Fabiola are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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