Health Savings Accounts (HSAs)

Take control of your health care expenses with a tax-favored savings account and quality major medical coverage. Everybody without other health insurance qualifies for these plans.

2011 Health Savings Account Limits / (2011 HSA Contribution Amounts)

Individual - $3,050 for 2011
Family -- $6,150 for 2011

2012 Health Savings Account Limits / (2012 HSA Contribution Amounts)

Individual - $3,100 for 2012
Family -- $6,250 for 2012

Catch-up provision for people 55 and older is $1000. A husband and wife over 55 should consider doing TWO individual plans and take advantage of BOTH catch-up provisions.

The most significant change recently is the amount you contribute to the HSA account is no longer limited by the deductible you choose. You can have a $1200 deductible as an individual and contribute the full amount and you can do this regardless of when during the year you open the account (must have insurance start by December 1 to make current year contribution). To read more about contribution limits and the HSA plans click here to read the US Treasury Guidelines.

These plans, although not understood by many consumers or agents, are really very simple. The plan is just separated into two parts – the high deductible major medical plan and the tax-favored savings account.

The high deductible plan covers eligible health care expenses after a “high deductible.” The deductibles differ with each insurance company but are generally $1,200 and higher for individuals and $2,500 and higher for multiple insureds (parent/child, husband/wife, or family). Prescriptions are covered via the deductible and you usually won’t find co-pays for office visits with this type of plan either. Also, the plan needs to be eligible for an HSA account – not all high deductible policies qualify as an HSA as some think. We’ll help you get the right health plan so you can get the tax deduction. For the self-employed, the insurance part of the plan is still tax deductible as any plan would be for them.

The second part of the plan is the savings account (see list below), which does not need to be done with the insurance company, and it can pay for the eligible medical expenses before the health plan kicks in (after the annual deductible). The big advantage to the HSA is that all eligible deposits are 100% tax-deductible and withdrawals are tax-free when used to cover eligible health expenses. Also, this is NOT a “use it or lose it plan.” This is a “use it or use it next year or use it eventually for retirement” plan. How much does your current health plan pay towards your retirement? The penalties for non-medical withdrawals are similar to the rules for early withdrawal from an IRA, except now they are 20% plus regular income tax.

Another advantage is that you can use the savings account to pay for things not covered by the health plan, such as dental insurance and expenses, medical devices, and vision services and expenses (glasses, contacts, exam...even laser eye surgery). Although these expenses don’t count towards your deductible, the savings in taxes is still attractive. The higher your tax-bracket, the more attractive these plans are.

If you or your spouse need maternity coverage these plans may not be the best route to travel depending on the state you live in. If maternity is required (by you) and not available on the HSA plan, consider another plan for the person needing the maternity coverage – the rest of the family could then apply for the HSA. OR, consider paying for the maternity out of pocket as sometimes the cost to add a maternity benefit is about the same as the benefit that could be received back. Your best bet if you need maternity coverage is to contact us to help you out.

Should you later get a job that provides health benefits you can still use the funds in the savings account to pay those future copays and and deductibles. It's just that you won't be able to add new funds to the account (unless the new plan is a qualified high-deductible plan). So, even if you know you're only going to hold the account for a short period it can still be quite beneficial.

Lastly, calling the health insurance plan an "HSA" is a misnomer. The account is the HSA, but it has become common place to refer to the health plan as "an HSA." The health plan is called a QHDHP (Qualified High-Deductible Health Plan)....which is why everyone just calls it an HSA.

View Our Online HSA Presentation presented by one of our many carriers...Time Insurance.

HSA Administrators	Setup Fee	Monthly Fee	Annual Fee	Investment Options	Fund Access	Forms
American Chartered Bank	None	None	None	Checking/CDs	Check/Debit
Bancorp Bank	None	$3/$0	None	Savings/ Investment Options	Check/Debit	--
Chase HSA	$20	$4.25	None	Savings/Chase Funds	Check/Debit
Discovery Benefits	None	$3	$25	Money Mkt/Vanguard Funds	Online Debit
First American Bank	None	None	None	Checking	Check/Debit
First HSA	$25	$5	None	Full Service Brokerage	Check/Debit
Time Insurance*	None	None	None	Savings	Withdrawal/ Debit*
Gilmore Bank	None	$50	None	Checking	Check/Debit	--
GoldenRule Insurance**	$10	$3	None	Checking/ Investment Options	Check
Health Savings Administrators	$20	$0/$2	$35/ $60	Savings/ Vanguard Funds	Withdrawal
HSA Bank	$25	$2.25/$0	None	Full Service Brokerage	Debit
HSA Trustee Services	$30	None	None	Checking	Check/Debit
Wells Fargo Bank	None	$4.25	None	Savings /Mutual Funds	Check/Debit