Individuals Or Business Can Participate In HSA Offerings

Category: Finance, Insurance.

Before we talk about saving money in a Health Savings Account( HSA) let s talk about what an HSA really is all about. HSAs must accompany a qualified high deductible plan( QHDP) to be allowed.

HSA are tax preferred savings accounts for use to pay for qualified medical expenses. Individuals or business can participate in HSA offerings. Employees who put money in to their HSA can deduct the contribution on their taxes. Money put in to an HSA by an employer is not considered income to the employee. There are many rules that surround HSA offerings and we are not going to delve into all the requirements needed to set up an HSA. HSA owners can put in$ 2, 850 for single coverage in 2007 and$ 5, 650 for family coverage in 200These numbers rise in 2008 to$ 2, 900 and$ 5, 800 respectively. This article will talk about the savings aspect of an HSA.

Therefore, HSA account holders can put in a size able amount of cash to help pay for expenses. I have seen figures that around 85% of consumers spend less than$ 1, 000 per year on health expenses. If the health plan you have accompanying the HSA covers wellness services like childhood immunizations or mammograms, no money will come out of your HSA. Drawing upon this figure, it stands to reason that many consumers would have a significant amount of money in their HSA each year if they are on the low end of health care spending. So there is no way to conclude that HSA accounts will have money in the account each year. Conversely, many Americans have serious illness, maintenance drugs or, diseases other ongoing medical needs that may drain the HSA account.

However, if there is money remaining at the end of a year, this money will grow tax deferred and never be taxed should the funds be used for qualified medical expenses. Take care of yourself. So what can you do to preserve the account balance in your HSA? Stop smoking, exercise and eat, lose weight better. You may even participate in an HSA that rewards you for this things. All of these things will contribute towards a healthier you which could translate in to a weight to keep more in your HSA. These rewards programs give incentives to individuals to lose weight, exercise and other things that should help to reduce their risk so that big medical claims do not occur.

If you have modest medical needs, you probably can save significantly. In conclusion, it is hard to predict if you really can save money in your HSA. If you have ongoing medical needs with expensive treatment, you probably cannot save in your HSA but your underlying health plan will protect you from catastrophic expenses. We will explore more details about HSA requirements in a later articles.

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