Monthly Archives: November 2017

Health Savings Accounts

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. They 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, whether deliberate or 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) , 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 Money put in the plan grows tax free and funds withdrawn for qualified medical expenses are also tax free.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. If over 55, the deduction is $600 higher for individual and $1200 higher for couples and will continue to rise at $100 a year until 2009, where it will be capped at $1000 for individuals and $2000 for families.

The money in the HSA cannot be used to pay the premiums for this policy except in certain circumstances (basically when you’re unemployed). It is meant to meet the deductible, co-pays, drug costs, eyeglasses or any other medical expense that could be itemized on an individual tax return as a medical expense.

Money withdrawn in excess of qualified medical expenses is taxed as income and subject to a 10{86a37033c8c1cee34684295718746ee9fc26ba1ceeea2da442b317c06ac0126e} penalty, unless the owner is disabled or over 65. Any money in the account at death is added to the taxable estate.

There are no income limits on this plan. If started early, when you are still young and healthy a substantial amount of money could accumulate to either meet higher medical costs as you get older or to use to supplement your income.

It pays to compare the costs of this plan with whatever your insurance you have now. It might turn out that your employer’s plan is still cheaper and you might want to keep it. Or you might want to consider HSA’s for their portability (you carry it from job to job without cost or loss of any contributions) and the tax benefit of having another vehicle to shelter income and capital growthFind Article, while giving you more control over the cost and quality of your health care.

Choose Health Insurance Wisely

This surely is a wise decision in the present time, but a few factors must be given due consideration while making the decision. The selection of the right policy might appear a very simple and an easy task to be accomplished as the insurance companies make it look like, but the reality is something else. It surely is not that easy, but if the task is performed wisely enough, it surely can yield astonishing refunds in the future.

First of all before making a haste decision, you must take all the factors into consideration and compare the policies offered by various health insurance companies with regard to the monthly premium that you will have to pay along with the coverage that is offered in return of that. This comparison will surely help you in making the right decision regarding the policy that is suitable for your pocket. Doing the comparison does not require much effort and time, but all that you need to do is go to any of the comparison sites and do the comparison online.

Yet another thing that you must know about when you are looking out for a health insurance policy is about coinsurance. This term might be unheard of before. Bit it is necessary that you understand the meaning and importance of it. This basically refers to the division of the large sum of the money that is to be paid as the medical bill between you and the insurance company. A larger sum of the money to be paid as the medical bill is paid by the insurance company. But lower the percentage to be paid by you, greater is the investment of the premium to be paid by you every month to the company.

You must also understand the facts regarding the deductibles. Most of the people who opt for any health insurance policy do not even know this termFree Reprint Articles, but it surely is required to be understood. This basically refers to the sum of the money that you ought to pay prior to the activation of the health insurance policy. The ranges of the deductibles vary from company to company and also depend on the policy that you opt for.

Health Insurance Already Explained

Often, larger companies are able to offer private health insurance plans as part of the employment package where they pay all or a large amount of the premium, however the rising cost of health insurance is also affecting employers with many finding it difficult to maintain this company benefit. For many workers , the health insurance benefits a company offers is what attracts them to the job and not the pay packet. Those are the lucky workers as not every employer can afford to offer company provided health care so the only alternative is to try and locate inexpensive health insurance elsewhere.

While many people today are still able to obtain some type of health insurance through their place of employment or privately, many others, the low paid, self-employed and the unemployed simply don’t know where to find good quality coverage at a fair price. Whilst a little research is required to make sensible comparisons, carrying out searches for low cost health insurance schemes on the internet has proved very helpful for many as you are able to compare benefits of a large number of providers using online comparison tables. Choosing the right health insurance is something that cannot be rushed if you have a family.

The good news is that people are learning that they have to be more selective and look carefully at every aspect of their potential health insurance plans to obtain the best possible premiums. Many national and local organizations of self-employed workers are now banding together to form cooperatives and combine their buying power to get affordable health insurance premiums through group policies. Before you decide on purchasing health insurance through another method and you are a member of a national or local organization, check with them first to see if they have made health insurance arrangements for their members as it will save you money.

You would be wise though to check the health insurance policy terms and conditions to make sure you fully understand what is covered and especially, what is not. For exampleHealth Fitness Articles, a health insurance company may define an emergency as anything that is life threatening condition that cannot be reasonably treated by a primary care physician. It may sound like a great deal to check on but your health insurance and the provider you decide to use are very important matters which should be looked at carefully. There is little disagreement that the growing number of people without health insurance is going to cause problems in the future. Worth considering is the statistic that shows that the fatality rate a person who does not have health insurance is twenty five percent higher than that of a person who has a health care plan.