MSA's are now HSA's
Health Savings Accounts with Tax Qualified High-Deductible Major Medical Health Plans For Everyone
Golden Rule
Health Savings Accounts Information (PPO & Any Doctor Plans)
Medical
Savings Insurance Co.
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Doctor, PPO Hospital Plan) Overview & Instant Quote
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For more information about Health Savings Accounts in the State of Florida please contact:
Richard Remmele
321-206-6255
NO RISK APPLICATION, 100% Refundable,
You will have the opportunity to review the policy when it has
been issued and mailed to you, and to accept or reject it at that time.
HEALTH SAVINGS ACCOUNTS (HSA)
Possible Benefits of HSA's in a nutshell
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Lower monthly health insurance premiums
- Use the difference in premiums to fund the savings account
- More stability in premiums
- Immediate tax-savings (all deposits are 100% deductible)
- Long-term growth potential of tax-free interest/investment income
- Tax-free withdrawals to pay for a broad range of medical expenses
- Tax-free withdrawals to pay for Long Term Care Insurance
- Tax-free withdrawals to pay for health insurance while unemployed
- In Network & Out of Network Coverage with PPO type plans
- PPO discounts for medical services not reimbursed (i.e. deductible)
- "Any Doctor" coverage with non PPO type plans
- More control over your own health care as compared to an HMO
The below discussion refers in general to the HSA rules and not to specific health plans unless the specific health plan is stated.
A new tax deduction was created at the end of 1996 for self-employed people and small employers, that was tied to high Deductible major medical plans called Medical Savings Accounts and they were limited to Self-employed people. As of January 1, 2004 the name has been changed to Health Savings Accounts (HSA) and they are now available to everyone..
With an HSA you may be able to send less money to an insurance company, send less money to the IRS, Pay tax-free for items not usually covered by health insurance, and have more money for your retirement.
Establishing an HSA allows you to deposit into this account up to $5,250 (new for 2005) and to deduct that same amount from your taxable earnings much like an IRA. This can save you over $1,400 in Tax Payments to the government (28% bracket) and even more if you are in a higher tax bracket. This is allowed if you have a qualifying high Deductible health plan. This health plan must have certain minimum and maximum annual deductible limits:
Deductible Minimums - Maximum Out of Pocket
Individual ---$1,000 --------- $5,250
Family ------$2,000 -------- $10,200
Most companies today offer plans with up to a $2,600 deductible for Individuals and up to a $5,250 deductible for families with 100% covered after the deductible. You can configure some plans with a higher out of pocket if that is what you want
The family Deductible is one Deductible for the entire family. All medical bills go into the pot. Once the pot reaches the Deductible amount the insurance company start paying the bills usually at 100%, but there are plans with 80% or 50% Co-insurance and in that case the maximum out of pocket expense would be higher.
When you pay medical expenses, including dental and vision and other expenses not normally covered by a major medical plan, from your HSA savings account; the amount withdrawn is tax free. This means that normally to pay a $3,000 non covered medical bill you would have to earn over $4,000 (28% tax bracket). This way you would only have to earn the $3,000 or to look at it another way Uncle Sam is in effect paying over $1,000 for you.
If you continue to deposit the maximum amount into your HSA each year and you do not incur many health related expenses you can build up a large balance in your account. You will be paid interest on this balance and you will not get taxed on that interest if you use your account for medical expenses listed by the IRS.
You can transfer this balance to another HSA that invests in Mutual Funds or to other HSA's that are brokerage accounts. You can also use this money tax-free to pre-pay retirement (Life care) or to pay premiums for Long Term Care Insurance.
When you reach 65 you can start withdrawing the money for any purpose without any penalty using the same rules that apply to IRA's.
This HSA is ideally suited to people who are healthy and already have a high Deductible plan or can self insure this portion of their medical bills.
You can also have certain supplemental coverage plans with an HSA. These Supplemental Plans will vary by company but some common examples are:
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Supplemental Accident plans are available from several companies some of which will pay up to $2,000 for a $100 copay for a visit to any doctor, hospital, walk-in clinic, or emergency for treatment of an accidental injury within 72 hours of that injury.
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Hospital Indemnity plan which pays a flat specific dollar amount for each day you are in the hospital.
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There are also other Supplemental Indemnity type plans that pay fixed amounts for a wider array of medical expenses.