Health Savings Accounts put the
Consumers back in control
Over the past 20 years healthcare costs have
more than tripled. This rising trend in healthcare costs is negating
any cost of living raises most American workers are receiving
Individuals and families have lost sight of
how their healthcare dollars are actually spent. Healthcare is
the only product we purchase with no idea of what it costs. The
only expense most consumers have is a doctor co-pay or prescription
co-pay. Ask a consumer what the retail cost of a prescription
is and they have no idea. With no cost barrier and no incentive
to control costs, we have over-utilization and health insurance
premiums spiraling out of control. The only way to rein in cost
is to make the consumer aware of the costs and the tools to make
cost effective healthcare decisions. It is time to change how
we finance and spend healthcare dollars.
Health Savings Accounts (HSA) are reinventing
our healthcare system by giving individuals and families control
over their healthcare dollars. HSA's are helping patients and
doctors communicate more directly due to the patient becoming
a more informed healthcare consumer when seeking medical advice.
HSA's not only give people more control over
their health and healthcare dollars they also provide individuals
and families with an affordable healthcare option. Since the inception
of HSA's two years ago, one-third of those who have purchased
HSA compatible insurance were formerly uninsured. Thirty-three
percent of HSA compatible health plans sold are now offered by
small businesses that previously did not offer health coverage.
In the past two years, over 3 million Americans have discovered
that HSA compatible insurance is the best most affordable option
for the healthcare coverage they need.
The idea behind a Health Savings Account (HSA)
is simple - give individuals the incentive and power to make their
own healthcare financing decisions. A recent study by Mercer showed
that nearly 80% of the insured population spends $1000 or less
on medical expenses annually. HSA's reward prudent consumers of
healthcare with funds that they own and that can earn interest
for them. How does it work? The employer or individual purchases
a qualified high deductible health plan to provide protection
from large medical bills. A Health Savings Account (HSA) is established
for each covered employee to pay for qualified medical expenses
(including the deductible). Deposits made to the HSA are tax deductible
and withdrawals for qualified medical expenses are tax free. Unused
money in the HSA belongs to the employee or individual. Money
not used is carried over from year to year. Careful spending is
rewarded with money that accumulates and grows!
Health Savings Accounts put Americans back
in control of their healthcare dollars and empower the doctor-patient
relationship. These accounts create incentives for Americans to
save for their future healthcare needs and invite consumerism
and competition back into the healthcare market.
New Account holder's are no longer limited to prorated deposits based on what month they join the plan. Regardless of when an account holder opens an account during the year, they will be able to contribute up to the full annual limit as long as they remain HSA eligible for 12 months.
Contributions are no longer limited by the deductible selected
HSA account holders can make a one-time transfer from an IRA (Individual Retirement Account) to their HSA.
Employees now have the ability to start a HSA by make a one-time tax-free transfer from a FSA (Flexibile Spending Account) and/or a HRA (Health Reimbursement Arrangement) Funds.
Employers may now make higher HSA contributions for non-highly compensated employees.
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