HEALTH SAVINGS ACCOUNTS

When combined with a high deductible health plan, a Health Savings Account is an alternative to traditional health insurance. A Health Savings Account is a tax-advantaged savings product that offers a different way for consumers to pay for their health care. The Health Savings Accounts enable members to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax-free basis.

 

A person must be covered by a high deductible health plan (HDHP) to take advantage of the HSAs. A HDHP generally costs less than traditional care coverage and the money saved on insurance can be put into the HSA. 

 

The HSA owner owns and controls the money in the HSA. Decisions on how to spend the money are made by the HSA owner. The HSA owner also chooses for the account one of the investment options that we offer.

 

A high deductible health plan (HDHP) is required to open an HSA. Sometimes referred to as a “catastrophic” health insurance plan, an HDHP is a less expensive health insurance plan that generally doesn't pay for the first several thousand dollars of health care expenses (i.e., the “deductible”) but will generally provide coverage after that. Of course, the HSA is available to help pay for the expenses that the insurance plan does not cover.

 

To contribute to an HSA for 2009, a member must be covered by an HDHP with a deductible of at least $1,150 (self-only coverage) or $2,300 (family coverage). The annual out-of-pocket (including deductibles and copays) for 2009 cannot exceed $5,800 (self-only coverage) or $11,600 (family coverage). HDHP's can have first dollar coverage (no deductible) for preventive care and apply higher out-of-pocket limits (copays & coinsurance) for non-network services.

 

A Health Savings Account (HSA) gives you more flexibility and control over your health care costs. That's because it empowers you to make your own health care decisions.

 

Note: Not intended as tax advice. Please consult a tax professional.