Opening a Health Savings Account today in partnership with an HSA qualified health insurance policy is what anyone should wisely consider as a smart alternative to continue paying for a traditional health insurance plan. Medical Insurance is the newest form of an investment vehicle that offers any person or business tremendous financial & tax benefits. Once you see the picture, understanding HSA health savings plans is very easy. Please read on and take an opportunity to become informed right now.
Since first being signed into law in December 2003 by the Federal Government, Health Savings Account (s) (HSA medical insurance plans) are already a proven success & the number of people switching to HSAs from traditional health plans is growing greatly each year. HSAs are here to stay & a few million people have already come on board. Health Savings Account Plans are literally available today to any person over 18 in the United States. HSAs offer significant financial benefits including tax, premium, & retirement savings for you, your family, and/or your business. Knowledge is power when it comes to your finances!
A Health Savings Account enables you to:
1) Have access to a wide PPO network and in most cases provides the coverage to allow you to continue seeing your current doctors & specialists.
2) Lower your health insurance premium by 25% - 50%. to accomplish this, be sure to fully compare health insurance plans. One can typically save between 80 to 250 dollars per month when they change their plan over from a traditional health insurance plan to an HSA qualified high deductible health savings plan. Now make sure to forget any preconceived notions you may have about having a high deductible. Do not pay attention to what you may have heard. Don't be deceived! Although you'll now have high deductible insurance, there are safety nets that will be there to catch you if & when the need arises.
After your HSA is setup, the first step to take is to place money you save from having a lower monthly premium and place it into your new Health Savings Account each month. Realize that doing this really doesn't cost you anything; you are simply transferring the money you have just saved into a new location.
3) Next, enjoy IRS created triple tax advantages (see the "a-b-c" listed below) that HSAs uniquely offer. Reduce your annual out-of-pocket income taxes up to $1800 or more. You'll save EVERY year on taxes from here on out. Below are your three main tax-saving pillars.
a) HSA Contributions (deposits into your HSA account) are 100% tax free
b) The interest on all of your account investment gains are also 100% tax free. The choice of investments is yours and range anywhere from low-interest, virtually zero risk bank rates to the widest range of stocks, bonds, & mutual funds. The level of risk is entirely up to you and you can modify it anytime.
c) Make 100% tax-free withdrawals for any HSA Eligible Expenses.
While your funds grow tax free, you are now building a significant retirement account of up to several hundred thousand dollars. If you must use the money to cover any part of your deductible, you can make a tax free withdrawal and use the funds. These benefits & factors discussed above diminish the impact of having a high deductible plan. Furthermore, realistically there will often be periods of time where your money is solely growing because you have no medical expenses.