Healthcare Consultants offers expert guidance on Health Savings Accounts or HSAs, which put market forces to work to create a health-conscious community and drive down health costs for everyone. They create financial incentives to manage health care expenses by allowing tax-free contributions to accumulate and, if used for qualified medical expenses, are never taxed.
As a plan option, HSAs are currently the number one way to bring down group health insurance costs by a factor of 30% or more.
What exactly is an Health Savings Account (HSA)?
Health Savings Accounts (HSAs) are tax-exempt accounts where funds grow to pay for medical expenses. They were created to help give control back to consumers and lower healthcare costs. There are two parts to an HSA: the Health Savings Account itself and a High Deductible Health Plan (HDHP). The HSA/HDHP combination provides consumers with more incentive to shop carefully for healthcare services.
The combination of an HSA with an HDHP offers substantial benefits:
- HDHPs have lower monthly premiums than traditional plans
- You can use tax-free dollars to purchase services, such as acupuncture and chiropractic services, that might not be covered on a traditional health insurance plan
- An HSA is your account; if you switch jobs, the HSA goes with you.
- HSA contributions can be rolled over from one year to the next; there is no “use it or lose it” requirement
To be eligible for an HSA, an employee must be covered by a high-deductible medical benefit plan, and must not be…
- Covered by another health plan that is not a high deductible health plan (with certain exceptions)
- Entitled to benefits under Medicare
- Eligible to be claimed as a dependent on another person’s tax return
Self-employed individuals are also eligible to establish an HSA.
Following are the health plan deductible parameters and maximum allowable contributions to an HSA for 2013 and 2014:
|HDHP Minimum Deductible Amount Individual||$1300||$1250|
|HDHP Maximum Out-of-Pocket Amount Individual|
|HSA Statutory Contribution Amount Individual||$3300||$3300|
|Catch-Up Contributions (age 55 and older)||$1000||$1000|