Intro to Health Savings Accounts

Health savings accounts were created on December 8th, 2003.  The idea was to help individuals and families save up for future medical expenses by using tax free money they had deposited in a health savings account (HSA).

In order to be eligible for an HSA, you need to have a "qualified high deductible health plan," sometimes referred to as an hsa health insurance plan.  The idea here is that, in order to be able to pay for all of your medical expenses tax-free, you are required to take on a higher deductible, less office visit coverage, and prescription coverage.  These items are still covered most of the time.  But they, and most other expenses are covered after you meet your deductible.

Tax Advantages

HSA health insurance plans provide a huge tax savings.  You can use the health savings account portion of your hsa health insurance plan to pay for your medical expenses tax free.  All you have to do is deposit money into the account pre-tax, and it's there when you have medical expenses.  You can pay those expenses tax free.

Price Advantages

The price advantages with these plans are huge.  Premiums are so much lower, because you agree to take on the everyday medical expenses yourself, such as; office visits, prescriptions, and urgent care visits.  You also agree to take on more risk in a major medical situation, by taking on a higher deductible, which you choose.

Coverage Advantages

There are coverage advantages to a high deductible health plan?  Yes, and the reason is, because many high deductible health plans cover 100% of your medical expenses after you meet your deductible.  Most plans provided by employers and self-employed plans cover 90%, 80%, or 70% or your medical expenses.  

There is almost always a stop-loss or maximum you would pay out of pocket in an entire year, but the point is, a $500 deductible plan isn't a $500 maximum out-of-pocket plan.  You could easily have a $4,500 stop loss on a $500 deductible plan.  With certain hsa health insurance plans, you know exactly what you maximum out of pocket risk is.

HSA health insurance plans are a great way to lower your monthly health insurance premiums, save money on taxes, and take control of your own healthcare dollars.

Find Out How an HSA Plan Could Change Your Situation