Health Savings Account's (HSA's) are available to everyone and are becoming more popular by the day.  You may have just heard about them, so let me explain what they can mean to you. 

Many times you can get an individual Major Medical policy for slightly less than you can a HSA qualified policy, but the advantages of an HSA far out weigh an individual policy.  One of the main differnces in the two types of plans are their deductibles. 


Individual plans


With an individual plan the deductible is normally PER PERSON, though most GOOD individual plans have what is called a "max out of pocket", or "stop loss".  Good individual plans will limit your out of pocket to two or three family members' deductibles, but this can really add up.


Example...


Let's say you chose a $5000 deductible for your family plan. If one person requires medical attention, then you will pay $5000 before your health insurance company starts to pick up their share.


If your whole family requires medical attention, then your max-out-of-pocket is normally "limited" to 2 or 3 family members. But, this can add up to 10 or 15 THOUSAND dollars before you reach your max-out-of-pocket, and the insurance actually kicks in. 


Be very careful and know what to expect from your health insurance plan.  Always ask your agent for your "explanation of benefits" before you sign on any dotted line.


Ahh... now comes the good part... your HSA plan


A comparable HSA plan can have a family deductible. Even though an HSA is always a high deductible plan, a family deductible is treated the same as an individual deductible.


In the same scenario (as above) the "medical attention" would have the same $5000 dedutible for one person as it would for the whole family. Once one family member reaches the deductible, the whole family has met the deductible for that year.


That, by itself is a huge savings!


What if I can't fund an HSA?


You can still receive the health and tax savings benefits without funding your HSA. What you won't be able to take advantage of without funding it is the tax deferred, retirement focused, "health savings" portion.


The tax deferred growth on your HSA can be added to year after year. If you allow it, it can grow to a substantial size that will be of great benefit to you and your family upon retirement.


Learn more about HSA's...


What are they part 1 

What are they part 2

Savings portion explained

Why make contributions

Qualified expenses


The problem is you may not have "extra" money laying around to fund a Health Savings Account (is there ever such a thing as extra money?). If you're having trouble figuring out whether you can even afford health insurance, an HSA may not be your individual solution.  Talk it over with someone who cares.


Hey! That's me!  Let's talk.


If you're struggling pay check to pay check, your solution may be to have a high deductible policy, save a ton of money, and combine it with a supplemental plan OR... If you know you just can't afford health insurance...


Have you thought about a supplemental plan by itself? There's a thought. 


It's not considered "credible coverage" by health insurance companies, but it beats the heck out of not having anything!


Check out supplemental health insurance plans

 

I'd like to thank Richard Day of North Carolina for making such awesome video's explaining the huge (tax) benefits you can obtain by taking advantage of HSA's. He is the expert.  Richard is licensed in North Carolina, South Carolina and Tennessee.  Thanks again Richard. 


IRS HSA Definition PDF