Health Savings Accounts

Let's talk about what a Health Savings Account is and how it can benefit you.

A health savings account is kind of like an IRA. You put pretax money into this account each year and the money grows tax deferred just like an IRA, but it also has an additional advantage in that you can take that money out any time to pay for a qualifying medical expense tax free.

This could be for doctor visits, prescription drugs, dental charges, chiropractic visits, alternative care - virtually any kind of medical expense. You can run these through your HSA and it they are paid for with pretax dollars. So the way these plans work, to be able to put money into a health savings account, you have to have a qualifying high deductible health insurance plan.

In 2010, to be a qualifying plan, you have to have a plan with a deductible between $1200.00 and $5950.00 for an individual or for a family between $2400.00 and $11,900.00 and then once you have that set up, you are allowed to make contributions to your HSA, so in 2010, the contribution limits for an individual are $3050.00, for a family, it's $6150.00 and anyone over age 55 can contribute an additional $1000.00.

These contributions will immediately lower your tax bill and then again, if you stay healthy, you're just building up a second retirement account and if you need to use the money to pay for medical expenses, you can withdraw it tax free. So it's a great strategy because your health insurance premiums will be much lower because of the higher deductible. Your taxes will be much lower and of course, you will also now be in control of your health care expenses, so you can decide how you want to spend that money. You can decide what doctor you want to go see, you can decide what kind of treatment you want to have without a government or insurance company bureaucrat telling you what you can or cannot do.

For a lot more great information and free access to our online instant quote system, go to www.HSAforAmerica.com.