Archive for July, 2009

HSA Case Studies

To Learn more about HSA plans review the following HSA Case Studies.

10 Reasons to Love an HSA

Many consumers are eager to learn more about health savings accounts, which continue to generate buzz as America’s newest option in health care coverage. The general assumption is that a financial tool with this much potential must be complex and difficult to understand. However, HSAs are simple to outline, and can be broken down into a list of ten basic points for consumers to easily digest.

1.     HSAs fund health care needs

HSA – Deducting an ipad for your special needs child’s education?

Steven Arreola, senior broker at Filice Insurance, updates our blogs on HSA’s and gets specific about education for kids with special needs.  Medical expenses that are deductible through a Health Savings Account follow the guidelines established for the medical and dental expense deduction on your tax return under internal revenue code section 502.

That section defines medical expenses as the costs of diagnosis, cure, mitigation, treatment or prevention of disease, and the costs for treatments affecting any part or function of the body.  These expenses include the cost of equipment, and the costs of special education.

Eligible HSA Expenses

Examples of eligible HSA expenses are listed here to help you use your new HSA account.

Qualified Medical Expenses ARE:
The Internal Revenue Service defines qualified medical care expenses as amounts paid for the diagnosis, cure, or treatment of a disease, and for treatments affecting any part or function of the body. The expenses must be primarily to alleviate a physical or mental defect or illness.

Is an HSA right for you?

So you have committed to getting an individual health insurance plan, you are beginning the challenging process of reviewing plan options, asking peers, and you hear about an HSA, maybe it is right for you. But, what is an HSA? A Health Savings Account (HSA) is a savings account that allows you to set aside money for health care tax-free, think of it as a Christmas Club for your health. You must have high deductible health insurance to open an HSA. Different from other benefit products, an HSA rolls over from year to year (there is no “use it or lose it”), interest is paid, money can be invested in mutual funds, and it is owned by you, individually.
An HSA has many distinct advantages:
-you pay less each month for high-deductible health insurance
-you receive tax advantages on multiple levels: pre-tax contributions to your HSA, tax-exempt interest and investment gains on your HSA, and tax-free withdrawals for qualified medical expenses
-you have complete control over your healthcare dollars, save or spend, it’s up to you
-your HSA is an account that you own and remains in place regardless of where you work or what company insures you
-there are a wide range of eligible medical expenses not typically covered by low deductible health insurance or other healthcare accounts
-your HAS contributions can be directed toward long-term investment vehicles, such as mutual funds, to maximize future value
EXAMPLES:
Here are two great examples of an HSA in practice:
Mary is a single, self-employed, female living in Los Angeles. Her annual income is $60,000. She has an HSA and a high deductible insurance plan, her annual deductible is $3,000. Her monthly insurance premiums on the plan are $150, and she contributes $100 per month to her HSA. She uses the money in her HSA, tax-free, to pay for her contact lenses, as well as acupuncture.
The Barnes family, a family that includes a husband and wife and two children ages 3 and 6, has an annual income of $75,000, a $4,000 deductible and an HSA. They contribute $1,000 at the beginning of each year, and use the account to pay the cost of speech therapy for heir youngest child, tax free.
An HSA might be right for you, consider applying for one, in conjunction with your high deductible insurance plan.

Top 10 Things to Consider when Shopping for Health Insurance

Top 10 Things to Consider When Choosing Health Insurance

With more and more people out of work these days, many Americans are having to make difficult decisions regarding health insurance policies. There are a wide variety of policies to choose from (Cobra coverage, catastrophic insurance, HMOs, PPOs, high-risk insurance, etc) and many people don’t know where to start looking or what to consider. Here are ten important issues to consider before researching health care options.

COBRA too expensive for many unemployed

For many unemployed Americans, the cost of maintaining COBRA health insurance is just too expensive.COBRA, the Consolidated Omnibus Budget Reconciliation Act of 1985, has as main goal to make health insurance available to unemployed Americans. The plan typically provides 18 months of health insurance to workers who have been laid off or fired from their jobs. Under COBRA, the unemployed individual must pay the full cost of the health insurance premium, plus administrative fees.The cost of COBRA can be staggering, because COBRA rates are based on group insurance, traditionally much more costly than individual health insurance rates. So, if an individual that has just lost their job, in this time of record high unemployment, and they do not know how long their will be out of work, paying for COBRA may not be an option. It is understandable that given this dilemma, many individuals who have just lost their job join the ranks of the uninsured, rather than elect COBRA.It is evident that the theory behind COBRA is a good one, but the reality is that it is not a reasonable alternative for the unemployed. A better alternative is individual health insurance coverage that a person buys themselves. There is no expiration on an individual policy, traditionally the cost is a fraction of what COBRA is, for identical coverage.

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