Video courtesy of Humana. Source: YouTube page of StaySmartStayHea1thy.

When searching the full text of the bill, H.R. 4872, there are zero occurrences of the word ‘HDHP’, zero occurrences of the word ‘HSA’, and not one single mention of the word ‘deductible’. Of course this doesn’t mean the bill won’t change high deductible plans and contribution limits, however as of today it does not look like there are any major changes being currently proposed.

The bill does aim to reduce the maximum pre-tax contributions that can be made to a Felxible Spending Account (FSA). Essentially cutting the maximum in half from $5000 per year to $2500 starting in 2012.

If the federal government does indeed drastically limit the annual pre-tax contributions to an FSA, it is not a stretch to think that future legislation will seek to limit HDHP contributions. More on this as it develops. Current HDHP contribution figures can be found here.

Health savings accounts are going mainstream. According to the 2010 Consumer Benchmark Survey, over 76 percent of respondents had an HSA-compatible health care plan. Of those, nearly 85 percent also had an HSA.

The accounts were most popular among people paying for their own coverage. Half of respondents covered on an individual plan had an HSA, while 42.7 percent of those covering between two and four people had one. More than 57 percent of people with an HSA or an HSA-compatible plan are over 45.

Respondents in both HSA-compatible plans and traditional plans share similar health and income distributions. Over 94 percent of respondents in HSA-compatible plans said they were in average or better health, compared with 93 percent of those in traditional plans. Forty-five percent of people in traditional plans reported annual household income between $25,000 and $74,000, compared with 44 percent of those with HSA-plans.

Read onwards…

Since their introduction in 2004, millions of Americans have discovered the freedom and security of HSA-qualified HDHPs.  Experts predict these plans will become the norm rather than the exception over the next 20 years.

Read onwards…

Source: Youtube

You are qualified for an HSA if:

• You are covered by a single or family high-deductible health plan (HDHP).
• You are not covered by any other health plan that provides any of the same benefits as the HDHP.
• You are not enrolled in Medicare.
• You cannot be claimed as a dependent on another person’s tax return.

To enroll in an HSA, you must have a primary U.S. residence as well as a valid Social Security Number.

Bend the Healthcare Trend: How Consumer-Driven Health and Wellness Plans Lower Insurance Costs

It is often said that growing wealth begins by making simple investments into a savings account over a prolonged period of time. But what would happen to the growth potential of that account if the money in the account could be invested in a high-interest yielding vehicle, such as a stock or a bond? Moreover, just how much money could one save each year if the money they invested into their savings accounts was actually tax-deductible?

The answer: consumers can save thousands of dollars each year simply by putting money into a specific type of savings account: a Health Savings Account, also known as a HSA.

What is a HSA?

An HSA is a specific type of savings account that anyone can open in just a few simple steps. Both individuals as well as families can open an HSA. The differences between an individual-coverage and a family-coverage Health Savings Account have to do with maximum annual contribution amounts to the account and out-of-pocket healthcare expense limits.

Like an IRA, the money that consumers set aside in their Health Savings Accounts can be invested in high-interest CDs, money markets, bonds, stocks, and more. However, contributions that consumers make to their Health Savings Accounts are tax deductible.

In order to have a HSA, participants need to be enrolled in qualifying high-deductible health insurance plans. There is a cap on maximum annual out-of-pocket expenses for these plans; for 2009, the maximum out-of-pocket amount for individual-coverage plans is $5,800 and $11,600 for family-coverage plans. The minimum out-of-pocket amount for a high-deductible health insurance plan for individual coverage is $1,150 and $2,300 for family coverage.

Health Savings Accounts and Taxes

Health Savings Accounts not only help consumers grow their savings, but they also provide generous tax benefits for Health Savings Account participants in a number of different ways:

1. Maximum annual tax deduction – The money that participants deposit in their HSA is deducted from their annual income, which reduces their annual income tax burden. For 2009, the maximum annual contribution that an individual who has self-only coverage can make is $3,000. For a family-coverage Health Savings Account plan, the maximum annual contribution for 2009 is $5,950. Additionally, participants can make catch-up contributions of $1,000 if they are 55 years old or older.

2. Tax-free medical expenses – Many individuals and families are unable to fully fund their HSA each year. The good news is that they can still receive tax benefits when they pay for qualifying medical expenses. In order to receive the tax benefits, these individuals simply need to open a Health Savings Account, deposit the minimum amount of money necessary to open the account, and then only deposit money when they need to pay for a medical expense. In a sense, they will simply filter money through the Health Saving Account instead of paying for healthcare expenses directly. Using this strategy, the money that they spend on healthcare is completely tax deductible.

3. Pay for medical expenses without the HSA and get reimbursed – Another strategy that allows HSA participants to maximize the growth potential of their HSA is to fully fund their Health Savings Accounts but pay for qualifying medical expenses out-of-pocket. At a later date, these individuals can simply reimburse themselves for their expenses from their Health Savings Account funds. Using this strategy, participants will be able to keep their Health Savings Accounts fully funded so they can maximize growth potential on their high-interest investments. The reimbursement is tax-free as long as it reimburses the participant for qualifying health related expenses.

HSA participants should keep in mind that the funds they spend on healthcare expenses are tax-free. However, they can withdraw funds from their Health Savings Accounts at any time to use for other expenses. When they withdraw money to use for other expenses, the withdraw is tax-deferred, which means that they will only pay taxes on the money once they withdraw it, but will not need to pay taxes on the growth within the account.

Opening an HSA is a wise choice for many individuals and families who are looking for ways to be financially savvy and save up to 50 percent in healthcare expenses each year. Opening a Health Savings Account is easy and simply requires participants to enroll in a qualifying high deductible insurance plan. By getting started today, HSA participants can start to save money, reduce their tax burdens, and grow their wealth in effective ways.

By Wiley Long – President, HSA for America – The nation’s leading independent health insurance firm specializing in individual and family HSA Insurance plans that work with Health Savings Accounts. Article Source: http://EzineArticles.com/?expert=Wiley_P_Long

You would never expect your car insurance to cover maintenance items such as gasoline and oil would you? Of course not; no major automobile insurance company offers insurance coverage for consumables such as gas, oil, filters, belts etcetera.  The cost of these items falls upon the consumer while the insurance product covers the unforeseen: major expenses relating to collisions, theft and comprehensive damage.

The point here?  Medical insurance should be no different.  Insurance products should promote consumerism – if your car insurance covered gasoline, there would be no point in filling up for $3.75 versus $4.00 a gallon.   In the same fashion, if a medical insurance plan covers a brand-name drug at a cost point of a $50 copay, there is no incentive for someone to fill that drug at a pharmacy with competitive pricing.  (need help getting cheaper drugs, check out: http://NeedyMeds.org)

Medical insurance plans that cover consumables such as prescription drugs and supplies are a luxury, a serious luxury.  Plans that have copays for primary care doctor’s visits and visits to specialists are also a luxury – these visits are not the unexpected – although they occur with varying frequency they are expected.  Just like the need to put gasoline in your car!

In it’s pure form insurance is a safety net, designed to protect an individual or group from the unexpected.  It is in place to cover large, unexpected expenses.  In the same manner that it makes no sense for car insurance to cover gasoline, it’s hard to make an argument for medical insurance day-to-day expenses such as doctor’s visits and prescriptions.

High-deductible plans bring medical insurance back to this basic form: providing excellent coverage for major, unexpected expenses.

HSAs can be opened and contributed to as long as the account owner is enrolled in an IRS-qualified high-deductible health plan (HDHP). They roll-over every year and never expire.

The main advantage of HDHPs are that they are drastically more affordable than more traditional, copay-based insurance. If you’re a generally healthy person, this means more money in your pocket.

With 133 days left in the year, you would only have to contribute an average of $22.93 per day to MAX out your single HSA contributions for tax year 2010 (maximum annual contribution is $3050). And remember these contributions are PRE-tax, meaning it’ll seem like even less money is coming out of your pocket.

By comparison, if you wanted to maximize your Roth IRA, you would need to contribute $37.59 per day to hit your annual max of $5000…and this money is POST-tax.

For a family, you would only need to contribute $46.24 per day to maximize your pre-tax elections to your HSA (maximum is $6150) Click here for more about HSA maximum contributions.

**Keep in mind these figures reflect a $0 balance as of today. If you’ve contributed already, the average daily contribution needed to hit your maximum allowed will be less**

Advocates for consumer-driven health care (CDHC) have argued for years that there should be more transparency when it comes to revealing the true cost of medical goods and services. After all, one of the main rationales for these types of health plans is that they encourage patients to ask their providers more questions about the course of care they are being recommended and then to pursue the path that will deliver the best results for the cost.

In practice, there is a problem with this presumption. It turns out that in the real world accurate pricing information is very difficult to ascertain and the price may be different for you than it is for me depending on the ability of the carrier that insures us to obtain discounts.

So, why not just ask your doctor how much the test he or she just ordered will actually cost? Well, the fact is your doc probably just doesn’t know.

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Benefits experts are stating that conventional coverage, such as health maintenance organizations (HMOs) and preferred provider organizations (PPOs), are still the main types of healthcare plans. But more health insurance companies and Texas employers will begin to offer High-Deductible Health Plans (HDHP), with a Health Savings Account (HSA) attached, during upcoming open-enrollment periods. The HSA is a tax-favored savings account that’s combined with a qualifying HDHP. This allows you to deposit tax-deductible funds into an account that you can use to cover medical costs, as well as enabling you to take control of your own health care decisions.

There are a variety of HDHPs available through various insurance companies. The plans are all similar in that they have deductibles between $1,100 and $5,500 for individuals, and between $2,200 and $11,000 for families. An HDHP with an HSA provides major medical coverage and a tax-free way to help you build savings for future medical expenses. It also gives you greater flexibility and discretion over how you use your health care benefits.

The HDHP also features higher annual deductibles — a minimum of $1,100 for individual coverage and $2,200 for family coverage — than other traditional health plans. The maximum amount out-of-pocket limit for HDHPs, in 2007, is $5,500 for individuals and $11,000 for family enrollment. Depending on the HDHP you purchase, you may have the choice of using in-network and out-of-network providers. Using in-network providers will save you money. With the exception of preventive care, you must meet the annual deductible before the plan pays benefits. Preventive care services may be paid as first dollar coverage or after a small deductible, or co-payment. A maximum dollar amount — up to $300, for instance — may apply.

When you enroll in an HDHP at work, it may be coupled with an HSA or a Health Reimbursement Arrangement (HRA), the latter of which is funded solely by the employer. As with an HSA, your HRA balance will roll over from year to year, but, unlike an HSA, employees don’t own the fund. So if you leave the company, you can’t take your HRA funds with you or roll them over into new accounts.

HSA plans have not been as widely accepted as was expected when they began to be introduced three years ago. But this year, it is expected that more big companies in Texas will offer them as a health insurance option, and many smaller, cash-strapped businesses will replace their current plans making it the only health-care choice.

With the wide variety of HDHPs and HSAs available today, and the growing administrative and financial burdens of the group health insurance marketplace, Texans need to make sure they have the right plan for themselves. You should take a look at the revolutionary, comprehensive individual health insurance solutions created by Precedent specifically for young, healthy individuals. For more information, visit us at our website, [http://www.precedent.com]. We offer highly competitive HDHP plans which are HSA-qualified, together with other unique and innovative individual health insurance solutions and an unparalleled “real time” application and acceptance experience.

Precedent puts a new spin on health insurance. Learn more at [http://www.precedent.com] Article Source: http://EzineArticles.com/?expert=Patt_Carpenter

The Employee Benefit Research Institute’s annual Retirement Confidence Survey shows that 43% of Workers have less than $10,000 for saved for retirement.  Yowch!!!

43% is a very high percentage, while $10,000 barely scratches the surface of an appropriate savings total for retirement.  While these statistics can be dwelled on and analyzed upwards and downwards, I think what this report shows us that above all else, the majority of Americans need to do a better job of saving for retirement.

An article that summarizes the Employee Benefit Research Institute’s report can be found here, provided by the Wall St. Cheat Sheet.  Full text of the Retirement Confidence Survey can be found here.

While this site focuses primarily on high-deductible health plans and how they work hand-in-hand with health savings accounts, we have previously discussed how HSAs can be retirement savings vehicles.  To be clear however, HSAs should by no means be a primary part of anyone’s retirement plans. The article Using Your Health Savings Account to Build Retirement Savings goes into this premise, based mostly on the fact that any monies set aside pre-tax that gain tax-free interest have retirement value.