Health Savings Accounts (HSA) are designed for people seeking a better alternative to the high cost of health insurance – those looking for lower premiums, better value, and financial rewards for being responsible. Health Savings Accounts are “use it or keep it“.
How Health Savings Accounts Work
Health Savings Account Requirements
Health Saving Accounts consist of two parts—first a qualified high deductible health insurance policy with a low premium, and second, a tax deductible investment account owned by you. The high deductible policy must have a calendar year minimum of $1,100 for single policies, and $2,200 for family policies. There are a number of insurance agents and brokers that provide qualified Health Savings Account policies.
2009 Calendar Year Maximum
- Single accounts-$3,000.00
- Family accounts-$5,950.00
- Additional contribution for account holders who attain age 55 by December 31, 2009 -$1,000.00
2010 Calendar Year Maximum
- Single accounts—$3,050.00
- Family accounts—$6,150.00
- Additional contribution for account holders who attain age 55 by December 31, 2010—$1,000.00
It’s not too late to make 2009 contributions. You have until April 15, 2010 to finalize your prior year’s contribution.
Health Savings Account Investments
The investment account is yours and is 100% vested. It does not have to go to your insurance company or their selected partner bank. Contributions made by you and/or your employer are fully tax deductible to you. Check the Contributions page for annual contribution maximums. Investment growth is not taxed while it is in the account. Withdrawals for eligible medical, dental and vision expenses are tax-free. You may withdraw for any non-medical expense anytime you like, but it will be subject to income tax plus 10% penalty (waived after age 65 or disability). You can even use a Health Savings Account as a supplemental retirement account. Once you reach retirement age, you can even use the funds for expenses not paid by Medicare: deductibles, co-insurance and even Part B and Part D premiums. Remember, it is use it or keep it — balances in Health Savings Accounts rollover from one year to the next.
Vanguard®
The Vanguard® no load mutual funds are available at Health Savings Administrators. They provide an excellent vehicle to invest for the future. Your money is always available if you need it, but if not, it can grow, tax-deferred, for your future use. Look over the fund chart on the investments page. There are many to choose from, including a money market account. You can check the status of your account online, 24/7. You will also receive a quarterly statement from us so you can track your investment.
Health Savings Accounts are not for everyone, but if you are in fairly good health and generally seek value in everything you purchase, you will find that this program will allow you to reduce health insurance costs and you retain the savings.
