Health Insurance Tips (Health Savings Accounts/HSAs)

Many clients and friends ask me about Health Savings Account Qualified Plans or HSAs. Since most folks look at the process of buying insurance like going to the dentist, it is my goal to make this as painless as possible. I teach my client how plans work and together we make decision on what suits their needs. Purchasing the proper coverage is a process and a very important one. The HSA qualified plan must be placed into the mix. I will present some basics here. Feel free to reply or contact me personally if you have specific questions. My advice is completely free!

I will also provide you with links for further education. Let me preface this conversation by saying that I’m going to focus on individual health plans/HSAs (not group).

1. HSA concept has two components: Insurance Policy and Bank Account

a) The Health Insurance component: This is a High Deductible Health Plan (HDHP) that is designated as HSA Qualified. You must purchase this plan from an insurance company. Premium mounts with vary from company to company, so get several quotes. You will buy an HSA Qualified Plan first.

b) The Bank Account component: This is a HSA designated checking account/debit account. You must open this account after your health plan has gone into effect. The bank will issue a debit card for medical expenses. You will open the HSA Bank account second.

2. HSAs are self-directed. You fund the account yourself up the mandated limits. There are annual maximums. Note: Your plan premium is separate from account funding.

3. HSA Qualified Plans and Bank Accounts have tax advantages
-HSA Qualified Plan premiums are tax deductible
-Distributions are tax-free for qualified medical expanses
-HSA accounts “roll-over” every year (your money stays in your account) tax-free
-Your personal contributions offer you an “above-the-line” deduction. An "above-the-line" deduction allows you to reduce your taxable income by the amount you contribute to your HSA. -Funds in the account grow tax-free through investment earnings, just like an IRA.
Please note that there are several other tax advantages to an HSA not listed.

4. HSAs Qualified Plans are a single deductible for individual and families.

5. HSAs are portable. If you leave your place of work, you take it with you.

I hope these basic points are helpful when considering coverage.

Helpful links:
Dept of Treasury: The Basics
http://www.treas.gov/offices/public-affairs/hsa/pdf/HSA-Tri-fold-english-07.pdf
http://ustreas.gov/offices/public-affairs/hsa/pdf/all-about-HSAs_072208.pdf

Have a great weekend!
Lance Cashion

Lance Cashion has been a licensed Life & Health Agent insurance agent in the State of Texas since 1998 and currently holds non-resident licenses in more than a dozen other states. He serves as the Vice President Marketing Technology and CTO at American Health Underwriters in Fort Worth, Texas.
-Serving the self-employed, small business owners, individuals and small groups
-Specializing in professional customer service and customer education (the heart of a teacher) -Employed at American Health Underwriters Inc (Est. 1968 by James H. Cashion Jr. Ft Worth, TX)
-10 years of experience dealing directly with clients, care providers and underwriters
-Major Medical and HSA Qualified Health Plans / Term Life Insurance / Medicare Supplements /Annuities