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Health Savings Accounts

by Shella Nyholm (2019-07-30)


Most people with health ... ... employer paid health ... really don’t know what their health care costs are. ... in many cases, they are limited in which health ... Most people with health insurance, especially employer paid health insurance, really don’t know what their health care costs are. Furthermore, in many cases, they are limited in which health providers (doctors, hospitals, pharmacies etc) they can use. Most people are locked into a network of doctors.

domino qiu onlineThey know what the co-pay is, but have no idea what the doctor actually charges. When insured consumers are hospitalized, they rarely see the bill. They don’t know if the insurance company was overcharged or not. There are firms that audit hospital bills for insurers and self insured companies. They get paid a percentage of what they save on the bill payer by finding overcharges, duplicate charges and the like. The last I heard these firms were still making lots of money.

Overcharging, Domino Qiu Online whether deliberate or Domino Qiu Online not, by doctors and hospitals drive up health care costs for all. (So do malpractice suits, but that’s another story.) In order to give consumers more direct control not only over their health costs, but in the choice of which doctor they can see or which hospital they can enter, Congress enacted the Health Savings Account Availability Act. As of the beginning of 2004, individuals who are not otherwise insured can have Health Savings Accounts (HSA) , Domino Qiu Online which carry with them some very attractive tax benefits.

An individual can set up an HSA for himself or his family. An employer can add an HSA option to the so-called cafeteria benefit plan it may already offer. The money put into the plan is before taxes, including Social Security, if part of an employer plan. Otherwise it is a above-the-line deduction, meaning you don’t have to itemize your deductions to get the tax break and that the deduction is not subject to the phase-out rules that make many itemized deductions unavailable to high wage earners.

The plan is set up like an IRA. A trustee approved by the IRS must be used. Money put in the plan grows tax free and funds withdrawn for qualified medical expenses are also tax free. Unlike the older Flexible Savings Accounts offered in employer cafeteria plans, you don’t have to spend the money put into the account by year end or otherwise lose whatever’s left. Money can be rolled over from year to year. This can allow for a nice chunk of money to accumulate that can be withdraw tax free at age 65.

In order to qualify, the individual or family must purchase a high deducible health insurance policy. These are special policies that have a minimum deductible of $1000 to a maximum of $5000 for an individual and $2000 to $10,000 for a family. The higher the deductible, the lower the premium. Individuals can deduct the lesser of $2250 or the deductible on the policy: for married couples or families it is double that.