26 Mar 2012

One HSA combo please..

26 Mar 2012

A health savings account (HSA) and a qualified high deductible health plan (QHDHP) combo, that is.

As more and more people are discovering, the HSA + QHDHP combination is one of the best options for facing rising healthcare costs. As a recent article in Desert News puts it, “consumers who use this solution have an opportunity to save hundreds and even thousands of dollars on health insurance premiums.”

Let’s break it down in simple terms. What’s the deductible? It’s the amount you pay for health care services before your insurance starts to kick in. So, for example, if your deductible is $2000, you would have to spend $2000 before your insurance starts covering your medical expenses. On the plus side, the premium for high-deductible plans is much less, meaning you’ll significantly lower your monthly expenses and still be able to rest assured that if you have significant medical bills, you won’t be on your own for long. That’s step one in saving money. The HSA is step two. How? Because you contribute to your health savings account with pretax dollars, and you can use the funds in the account for any medical expenses, including those that count toward your deductible.

Ashlea Ebeling from Forbes explains the trade-off: “While having to pay hundreds or even thousands of dollars in deductibles may sound off-putting at first, there’s a silver lining: these plans often come with an optional health savings account. For savvy savers, it’s an incredible hidden way to prefund healthcare costs.” In the same article, Christopher Goldsmith, VP at Goldsmith explains, “The tax advantages don’t get any better. HSAs are a wonderful way for Americans to accumulate a health care nest egg.”

We recommend having a discussion with a tax professional to understand the tax benefits specific to your situation. Give us a call and we’ll help you determine if it is the right option for you, and in the meantime you can check out a very informative video, also courtesy of Desert News: 10 Common Medical Expenses You Can Pay for with your Health Savings Account.

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