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The latest advance in consumer-driven health careBeniversal® health savings accounts allow employers and employees to tackle the growing costs of health care togetherHealth savings accounts (HSAs) are funded by:
and must be used in conjunction with high deductible, low premium health insurance plans. These accounts are owned by individuals who can use them to save for future qualified medical and retiree health expenses on a tax-free basis. How health savings plans workEmployees tap the funds in their health savings accounts up to the amount of their insurance deductible, at which point the insurance policy begins to cover eligible costs. Employees also can tap their HSA for out-of-pocket costs not covered by their insurance. Annual out-of-pocket expenses cannot exceed $5,000 for an individual or $10,000 for a family. Those expenses include copayments, long-term care premiums, COBRA premiums, prescription drugs, hospital costs, vision and dental exams, etc. but not the insurance policy premium cost. Who qualifies for health savings plans?Employees must be under 65, not claimed as someone else's dependent, and cannot have other "first dollar" health insurance coverage. (Specialty insurance coverage such as vision, dental, long-term care is allowed.) High deductible policies that qualifyTo meet the requirements for an HSA, policies must carry deductibles of at least $1,000 for individuals and $2,000 for families. Maximum deductibles are $3,000 for individuals or $6,000 for families, whichever is lower. Maximum health savings account contributionsThe maximum contribution that can be made to an HSA is $2,650 for individuals or $5,250 for families, or the deductible from the health insurance plan, whichever is lower. Participants 55 to 64 can make an additional $600 contribution. Comparing HSA to FSA Plans: Investable, portable, and able to roll overEmployees can change their contributions to an HSA on a monthly basis. (FSA plans require that the monthly contribution is set at one point during the year.) Unlike FSA plans, HSA end-of-year balances can be rolled over into the following year. Employees can also take an HSA with them when they leave the company. They can invest the funds in their HSA just as they invest IRA funds. In the event of a death, HSA funds go to the employee's beneficiary or estate.
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Health Savings Accounts are a tax-free way to save for medical expenses now and into the future. Plus, the money in an HSA can grow through wise investment strategies.
Other tax-free alternatives HRAs or health reimbursement accounts, are funded by the employer, not the employee. FSAs or flexible spending accounts are funded by the employee, and can be used for both medical and dependent day care expenses. Contact us for more information about ways you and your employees can save. |
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