The turn of the new year is approaching us fast and with this event comes new years resolutions. I know many of us resolute to spend more time with family, lead a healthier lifestyle, and obtain more financial freedom. For those of you who don't know about Health Savings Accounts (HSA) now is the time to educate yourself and reap it's benefits.
A HSA is tax advantaged medical savings account available to those who pay United States taxes. You do need to have a HSA qualified health insurance plan in order to have the account and that is where I come into play.
But first let me tell you about some of the HSA financial benefits:
- You own the HSA and it is your to keep
- The money you contribute to the account is not subject to federal income tax at the time of deposit and monies deposited that are not utilized will accumulate and roll over every year - there is a minimum and limit on how much you can contribute to a HSA (please see below for more information)
- The money you save in the account can be used to pay for qualified medical expenses without any federal tax liability and will draw interest
- There is a penalty for withdrawals used for non-medical or non-qualified expenses, these penalties are similar to those of an IRA and there are benefits to you waiting to use the accumulated monies until after retirement age as financial penalties will apply if money is taken out early for non-qualified expenses - The key is to save, allowing for a better financial future!
The HSA qualified plans are a consumer driven health care policy. Meaning it allows members to use the health savings account to pay for routine medical expenses directly and provides members with catastrophic coverage at the same time. This concept saves all parties involved money!
A high deductible policy premium is more affordable due to the member being out of pocket the full deductible amount before the plan pays. Remember the deductible will be paid from your HSA, again saving you money.
The following information is from the US Department of Treasury website: http://www.treasury.gov/press/releases/hp975.htm
New Annual Contribution Levels for HSAs:
- For 2009, the maximum annual HSA contribution for an eligible individual with self-only coverage is $3,000.
- For family coverage, the maximum annual HSA contribution is $5,950.
- Catch up contribution for individual who are 55 or older is increased by statute to $1,000 for 2009 and all years going forward.
- Individuals who are eligible individuals on the first day of the last month of the taxable year (December for most taxpayers) are allowed the full annual contribution (plus catch up contribution, if 55 or older by year end), regardless of the number of months the individual was an eligible individual in the year. For individuals who are no longer eligible individuals on that date, both the HSA contribution and catch up contribution apply pro rata based on the number of months of the year a taxpayer is an eligible individual.
New Amounts for Out-of-Pocket Spending on HSA-Compatible HDHPs:
- For 2009, the maximum annual out-of-pocket amounts for HDHP self-coverage increase to $5,800 and the maximum annual out-of-pocket amount for HDHP family coverage is twice that, $11,600.
Minimum Deductible Amounts for HSA-Compatible HDHPs:
- For 2009, the minimum deductible for HDHPs increases to $1,150 for self-only coverage and $2,300 for family coverage.
In addition, a fiscal year plan that satisfies the requirements for an HDHP on the first day of the first month of its fiscal year may apply that deductible for the entire fiscal year.
HSAs are great products and they allow for a healthier and better financial future for yourself and your family. I have a HSA qualified plan along with the account and I love the benefits I have for my family! I am here to answer questions you have and to help you find the appropriate carrier that best meets your needs!
Make 2009 the year to start saving for your future!
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