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 Health Saving Account 

Health Savings Account (HSA) - What Is It?

HSA is for those who have a high deductible health insurance and it is specifically stated in the insurance policy that it is with HSA.

Some background about HSA as a characteristic for a health insurance product:

During President Bush’s mandate, this product hit the market, to enable more people to be insured. The price was the lowest, but of course there were high deductible limits. When the deductible is met, the insurance covers almost everything.

By the way, 10 years ago, as a start up agent, a health insurance plan with HSA was the first insurance product sold by me in the U.S. market. An owner of a restaurant called after a brochure I left there and said to me: “It is exactly what I want. Can you come back with an application?”

Later this product entered the group health insurance market as well. Their deductible levels were significantly lower, but higher when compared to other insurance options.

What Is so Special about this Health Saving Account?

This account accumulates as a savings account, but still gives the following significant advantages:

• The funds in it grow tax-free.

• Applied funds are not taxed.

• If you become unemployed, you can pay your insurance premiums with money from it.

• You can withdraw the money freely for any purpose after the age of 65.

• You can pay for dental care and vision care.

• Once its purpose to help pay for deductible is utilized, you can pay the coinsurance through it, along with other out-of-pocket medical bills.

FYI: After accumulating only $ 2,000, CHASE offers investing HSA money in mutual funds for better accumulation.

●This account can play an important role as part of your backup financial reserve in case of losing a job, disability, or any financial hardship.

●Even if you have less money in that account, always carry money in it first, and then pay medical bills. This way you secure more tax deductions.

●There is no minimum contribution (unless the bank has requirements). The maximum amounts allowed for deposit into HSA are announced by the IRS each year.

For those that cannot afford health insurance with a low deductible, it remains a barrier for catastrophic bills. For others, who have money to secure the deductible, it is a rational piggy bank.

When you are offered $6,000 deductible for health insurance, usually (not always) the health savings account is included in the product options.

The new health law brings adverse change to this account: If you withdraw money without a purpose defined by the plan, the penalty is 20%, where it was only 10% before. The new healthcare law also bans the purchase of non-prescription medicines with funds from that account (perhaps due to abuse of the benefit).

HSA has its dynamics. Changes are constant, but the main conception is still the same. 

This short summary is only an illustration about insurance products with HSA. Knowing more about it and how to work with it can save you much more money.

More information can be found such as presentations here… What does the IRS say here… What CHASE offers here… Other banks give a higher percentage of interest on HSA here... and here… and here….and more at this link…(right click to open link on new window).

My regards, and see you soon: Anna Ruseva, Broker (773) 988-7608

Health Insurance


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