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AN IN-DEPTH OVERVIEW OF HOW AN HSA WORKS

IF YOUR HEALTH INSURANCE COSTS ARE OUT OF CONTROL, A Health Savings ACCOUNT MAY BE JUST WHAT THE DOCTOR ORDERED TO GET YOUR HEALTH CARE COST UNDER CONTROL.

What is a Health Savings account?

A Health Savings account (HSA) is a special tax-sheltered savings account for medical bills. It is similar to an IRA and works in conjunction with a special low cost, “high deductible” health insurance to provide comprehensive healthcare coverage at the lowest possible net cost for those who qualify.

Daveco & Associates Insurance represents Health Savings plans that can be purchased by anyone in need of insurance and, you can take advantage of the many tax benefits a Health Savings account offers.

Instead of buying high-priced health insurance with low co-pays and a low deductible, you buy a low cost policy with a “high” deductible for the “big” bills and SAVE THE DIFFERENCE—in your personal HSA—to cover “small bills”. Money deposited into your personal HSA is 100% tax deductible (just like a traditional IRA) and can be easily accessed to pay most medical bills with tax free money (even stuff not covered by insurance like dental and vision). What you don’t use for medical bills is yours to keep—it stays in your personal HSA and keeps growing on a tax-favored basis to cover future medical bills, or supplement retirement, just like an IRA—it’s a medical IRA!

In summary, the Health Savings account plan offers lower premiums, lower taxes, more control of your health care, freedom of choice, and more cash at retirement. Click Here to Get a FREE HSA Quote by e-mail.

How your personal HSA money can be used

When you file your taxes each year, self-employed deductions on line 29, all of the money you have deposited into your personal HSA will be tax-deductible on line 33, front page, of your 1040 form. This will cut your tax bill by an average of $1,700 for a family (and about $850 for a single plus if self-employed, 100% of premium deductible). You could certainly say that with a HSA, you are paying medical bills with money you would otherwise have paid in taxes! How cool is that?
Keep funding the HSA every year to the maximum amount allowable (this amount is steadily increasing every year). This will reduce your taxes each year plus, more importantly, will give you a larger cushion against unexpected “catastrophic” type claims in the future. After only two or three years of good health and steady funding of the HSA, there should be more than enough in the savings account to cover any foreseeable medical expenses without ever having to dip into your pockets. (Dipping into your personal HSA savings account is not the same as dipping into your pocket. Your personal HSA is the practical equivalent of “insurance” coverage for the small bills—what you do not use is yours to keep---which is dramatically different than paying an insurance company a few thousand dollars a year to do virtually the same thing—insure the “small” bills.
Remember, what you don’t use for medical bills from your personal HSA is yours to keep—just like an IRA. The balance continues to grow and grow on a tax-sheltered basis. Once you reach age 65, the account can basically be used just like a traditional IRA (withdrawals subject only to income tax reporting—no “premature withdrawal penalties”).

Covered Expenses Under the HSA Insurance Policy

When purchasing prescriptions, simply visit a participating PPO discount pharmacy (most all of the major chains participate) and pay the discounted amount with tax-free money from your personal HSA. Prescriptions are also reimbursable after the deductible is satisfied for the year.
Daveco & Associates Insurance is an authorized agent of Direct Rx 4 U, Inc., a company that offers $10.00 & $20.00 copay prescriptions from USA Pharmacies or Discounted Canadian Prescriptions with savings up to 85% to Americans needing to lower their prescription cost. This is a free service offered by Daveco & Associates.

Click here for Canadian Prescription Information & Drug Pricing
Click here for information on Discount Prescriptions from USA Pharmacies

Some medical expenses not covered by the insurance policy may still be considered allowable expenses under the HSA. For example, dental work (including braces) vision care (including glasses) eye surgery, alternative therapies such as acupuncture, etc. can all be paid for with tax-free money from your personal HSA. Click here for a list of HSA qualified expenses.

The HSA “Family Deductible” is a different concept

Virtually every insurance policy on the market covering a family has a per person deductible to a maximum of usually three people. The HSA per family deductible is a unique feature of a qualifying HSA plan and required by law. With the HSA per family deductible, expenses accumulated by each person is credited towards the per family deductible.

If you are concerned about the amount of the HSA insurance deductible(s), Click here to learn why a “high deductible” HSA is not a big deal!

Establishing a HSA Plan is as easy as 1-2-3…

Apply for a “high deductible” HSA-Qualified health insurance policy to take advantage of the many tax benefits. Monthly premiums are low because of the nature of the policy. Depending on your tax status, your insurance premiums may be tax deductible.
Establishing the HSA savings account can be done at the same time as application for the health insurance is applied for.
Fund the savings account. There is no minimum contribution required; however, just like and IRA there is an annual maximum. Click here to learn about the current HSA guidelines.

Underwriting and Pre-Existing Health Conditions

Unless applying for employer sponsored coverage (group insurance) an HSA insurance policy will be an individually underwritten policy. This means before the HSA policy is issued you will be subject to underwriting on an individual basis. Premiums are determined by the age, sex, location, and health factors of each person or family to be insured, just as any other “individually underwritten” coverage. Depending on the laws in your state, coverage for certain conditions may be excluded or modified, a higher premium may be charged, or coverage could be completely denied.

Most insurance companies offering a HSA do not require a medical exam for the insurance to be issued. Because of the “high deductible” nature of the policy, some conditions that would be excluded or modified under a traditional policy are often not under the HSA policy. In most cases, underwriting consist of the completion of an application and forwarding it to the insurance company for review. With one company the application can be completed over the internet. The key to helping us help you is full disclosure of health history on your application. THE MORE WE KNOW, THE BETTER ADVISE AND COUNSEL WE CAN OFFER PRIOR TO SUBMITTING AN APPLICATION FOR COVERAGE.

Because we represent several different insurance companies, it is difficult to explain with any further degree of accuracy the covered expenses, exclusions and limitations as each insurance company has different criteria, not only in general, but on a state by state basis as well. Our Agency offers the HSA Qualified policy in many states. For questions about coverage available in your state, email infoHSA@davecoinsurance.com.

Our company can help with both the “high deductible” health insurance policy and getting you started with a personal HSA savings account. We are certainly one of the very few one-stop shopping locations for Health Savings account plans in the internet. Click here to learn about HSA guidelines and policy design.