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HSA - HEALTH SAVINGS ACCOUNT
The HSA has introduced an efficient way for the individuals
to pay their medical bills and treatment costs. The HSA has two parts;
one is the normal health insurance policy which enables you to pay your
medical bills. The next part is unique it’s the investment account or
the retirement account; this allows you to invest money for later medical
use. The unused money gets accumulated until retirement and can be used
for any purpose.
w Anyone who possesses
a high deductible policy can open the health savings account.
w A high deductible policy
is an inexpensive or cheap plan, which would cover your
medical expenses in the later stage, in which you have to pay the
initial deductible amount which would come around several thousand dollars
first.
w The major advantage here
is you can spend the invested cash for other non medical reasons too,
but then you must pay the income tax and a 10% penalty. If your age is
above 65 then there is no need to pay the penalty, but you can’t escape
from the tax.
w The health savings account
avoids the burden of paying huge amount of cash to the health insurance
company.You could invest this money and spend it for your medical
expenses or you could save the money and use it for any nonmedical
expense.
w If you want to take up
a health savings account, then you should be under the high deductible
health plan, you should not be under any other health insurance plans.
w Even if you change your
job, your health savings account will remain.
w You can open a health
savings account on your own or your employer can do that for you.
w The HSA and the flexible
spending plan may look similar, but there some major differences.Under
the HSA plan if you had any balance in your account for the previous year
it would continue for the current year too. But in the flex plan, you
would lose the money if you do not use it up for that year. Another difference
is that you cannot open your own flexible spending plan your employer
has to do it for you. And the flexible spending plan does not ask you
for the high deductible policy but you HSA does. But the tax benefits
of both plans are similar.
w You can maintain the
account even when you are shifting to another state.
w After your death, the
health account savings funds would reach your spouse or any other beneficiary,
who are mentioned in the will.
w The health savings account
is beneficial because, this plan makes people aware of unnecessary medical
examinations and expenses.
w Initially you have to
contribute an amount for the HSA, but then this proves to be a lot better
than struggling for a large amount of money due to sudden medical expense.
The initial contribution is also only an investment, so this plans is
beneficial both ways.
w HSA would cover up the
cost for any valid medical treatment; you could also use it for your family
tax free.
For more informations on our services
contact insurance brokers John
Good| Kelly Good |
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