What is a Health Savings Account (ıHSAı)?
A Health Savings Account is a tax-advantaged addition to your traditional health insurance plan. It is the savings product that offers a different way for consumers to save and pay for their health care costs. HSA enable you to pay for current qualified medical expenses and save for future qualified medical and retiree health expenses on a tax-free basis.
In order to qualify for the HSA account you must first be covered by a High Deductible Health Plan (HDHP) to be able to take advantage of HSAs. An HDHP generally costs less than what traditional health care coverage costs, so the money that you save on insurance can therefore be put into the Health Savings Account.
One of the best benefits is that you own and you control the money in your HSA. Decisions on how to spend the money are made by you without relying on a third party or a health insurer. You deposit money in your HSA, where it earns interest tax-free. Funds are not taxed when withdrawn for qualified medical expenses. You will also decide what types of investments to make with the money in the account in order to make it grow.
Health Savings Accounts allow you to legally avoid federal income tax by depositing 100% of the health plan's deductible, up to $2,900 for singles or $5,800 for families, into your Health Savings Account. Whatever you deposit into your account up to April 15, 2009 is an "above the line" tax deduction for your 2008 taxes, meaning you get a federal income tax deduction for money you put in even if you take the standard deduction and donıt itemize deductions. If your employer makes a Health Savings Account contribution for you, it is ıexcludedı from income, and not subject to any income tax or FICA. Either way, this will immediately reduce your federal income tax due for the year. Most states also allow you to take a state income tax deduction for HSA contributions.
A great place to start your free search and compare plans from multiple carriers is HealthMedicalPlans.com, which provides detailed information about finding individual affordable health insurance and family health insurance. To contact Ron Filian email him at Ron@HealthMedicalPlans.com or toll free at 866-674-0377.