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What is an HSA?
Why should I have a Health Saving Account
for me or my family?
How does it work?
Answers to "deductibles" questions
Who qualifies?
List of
Eligible Medical Expenses
Reports & Management Fees
Benefits -
Tax Benefits
Tax Deductible
Contribution Limits
Why would someone who is less healthy want a Health Savings
Account?
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What is a Health
Savings Account?
A Health
Savings Account (HSA) is a tax-favored savings account that
is combined with high deductible insurance to help pay your
medical expenses. The savings in the account pay your health
costs until the deductible is met and the insurance takes over
payment. Summary:
Health Savings Accounts are a new option for health insurance
and they have two parts:
1) a health
insurance policy that covers large hospital bills.
2) the Health Savings Account, an investment account or
retirement account..
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How does it work?
Each year, you or
your employer are entitled to contribute the amount of your
health plan’s deductible. This contribution is 100
percent tax deductible. You then withdraw money from
the account as needed.
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What if I never
meet my deductible? Do I lose the remaining money?
Absolutely not! The
remaining money in the HSA is your money. It will
continue to accrue interest and will remain in your account year
after year until you withdraw it.
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Who can qualify
for an HSA?
The individual must be:
1) Covered by high deductible medical insurance;
2) Not covered under other health insurance; and
3) Not entitled to Medicare
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| Can my spouse have an HSA?
Yes, provided he or she is covered under his or her own high
deductible medical insurance. If both of you have HSAs,
the maximum tax-deductible savings account contribution for each
is equal to one-half of the maximum tax-deductible family
contribution limit. This limit is determined by the
deductible level of your medical plan.
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| Are there HSA management fees?
Yes. Minimal. |
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| How do HSAs work with Physician and
Provider networks?
Paying the bill: If you have network coverage, you
should not pay for your in-network medical care at the time of
service. Your provider will send the bill to the network
for repricing at the discounted rate.
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The Benefits of an HSA
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Your savings can pay
100 percent of medical costs until the deductible is met.
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Your savings can be
used to pay non-covered medical expenses such as dental and
vision.
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Your savings can be
used to purchase over-the-counter drugs and long-term care
insurance.
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It is your account.
If you change jobs it goes with you.
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It can be used to
cover co-payments once your deductible is met.
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During any period of
unemployment, your savings can be used to pay health insurance
premiums.
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Your employer can
make contributions to your account.
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After age 55, you can
make additional contributions over the amount of your
deductible.
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Tax Benefits
What are the benefits?
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All contributions are
100 percent tax deductible.
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All accrued interest
is tax deferred. If withdrawn for medical expenses,
all interest is tax free.
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After age 65 you can
withdraw funds for any reason, without tax penalty.
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What are the tax deductible
contribution limits?
Monthly contribution limits are based on:
1) The medical insurance deductible amount;
2) Whether you have single or family coverage under the high
deductible
medical
insurance; and
3) Medicare eligibility. You may no longer contribute once you
become
entitled to Medicare. |
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Singles |
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Families |
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$1,000 |
$1,700 |
$2,600
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$2,000 |
$3,450 |
$5,150 |
Maximum Monthly
Deposit
(Tax-Deductible Limit)* |
$83.33 |
$141.66 |
$216.66 |
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$166.66 |
$287.50 |
$429.16 |
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*Those individuals 55 and over may
contribute an additional $500 for tax year 2004.
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More
information?
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Additional Information
on Health Savings Accounts (HSA |
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Do I have an HSA qualified health insurance
plan?
Why would some one who is less healthy want
a Health Savings Account?
Is there an IRS approved list of medical
expenses that I can spend my tax free Health Savings Accounts
funds on?
| Do I have an HSA qualified
health insurance plan? |
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The quickest way;
Ask your health insurance
company. If they say ‘yes,’ then you know your health plan
qualifies you to open an Oklahoma Health Savings Account (HSA).
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Yes, if your insurer offers both the insurance and the HSA
account for the health insurance policy you have. |
| If your employer
provides your health insurance, ask your employer. |
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Family Insurance: Yes, so far, if your annual
deductible is between $2,000 and $10,000. This can,
however, become complicated depending on the type of
deductible, so it is best to contact your insurer or
John Krogh AARK
Insurance.
Singles: Yes, so far, if your annual
deductible is at least $1,000 or not more than $5,000.
No, it does not qualify as a HSA qualified health
insurance plan if your insurance plan maximum
out-of-pocket expenditure exceed $5,000. |
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Your best option is to
contact John Krogh AARK Insurance and he will quickly and carefully
evaluate your situation to see if an Oklahoma Health Savings
Account is a viable option for you or you and your family.
Call
1-888-357-4501.
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Why
would someone who is less healthy want a Health Savings
Account? |
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Control over their own health care
decisions and treatments.
- Financial incentive.
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Let John Krogh at AARK Insurance
explain this in detail.
Call
1-888-357-4501. |
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Is there an IRS approved list of medical expenses that I can
spend my tax free Health Savings Accounts funds on? What
Other information is provided by the IRS? |
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Yes, there is list of allowable expenses published by the
U.S. Treasury Department, actually the Internal Revenue
Service, referred generally as the ‘213 (d)’ list, since it
appears in IRS regulation 213 (d). Here is a link to the
list of allowable/not allowable expenditures:
http://www.irs.gov/pub/irs-pdf/p502.pdf. To order the
publication, call 1-800-TAX-FORM.
In general, you can spend tax-free from your Health Savings
Account on all medical, dental (including braces for your
children), and vision expenses, chiropractic visits, and
even acupuncture, but not on your insurance premium, unless
you are unemployed and are collecting Federal unemployment
benefits.
To Qualify as Self-Employed
(IRS)
Health Savings Accounts & Other Tax-Favored Health Plans
(IRS) |
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