How Will An Hsa Save Me Money?
The Health Savings Account (HSA) is a tool to help you save money on health insurance. But how does it do that?
A Health Savings Account (HSA) is just a savings account. Duh, I know. It is just like a bank account where you can put money in and you can gain some interest.
But it has two special qualities that a regular bank account doesn't. First, when you put money in, that amount gets reduced from your taxable income. And you know what that means! You pay less taxes.
The second thing that's different about an HSA is that you can only withdraw money for specified medical reasons. Doctor visits, pharmaceutical or over-the-counter drugs, hospital visits, etc. may be paid with HSA money.
Now, all this helps you with money a little bit. You gain some interest in the account. And you pay a little less in taxes.
But the real benefit comes in an indirect way.
When you sign up for an HSA, your HSA custodian (insurance agent, bank, financial advisor, etc.) will ask you if you have a high-deductible health plan. That means whether you are currently covered by a health insurance policy that has a deductible of at least $1,000 for an individual and $2,000 for a family.
If you don't have that type of health insurance, you cannot get an HSA. Period.
But if you do, then the health insurance and the HSA fit together perfectly.
You pay for the small stuff each year with your HSA money. Then, when and if a big medical bill comes, your health insurance policy covers it.
But a funny thing happens when you switch from a low-deductible health plan to a high-deductible health plan.
Your premiums, that is the payments you have to make month-to-month, drop through the floor. They become astonishingly low.
For my wife and I, a low-deductible policy would cost about $1,100 a month. That's a huge amount!
But we've chosen a high-deductible policy, which costs $175 a month.
That's an incredible difference.
In fact, it is such a huge difference, that I want you to do a little calculation with me. What if I got sick every single year, so sick that I had to use my entire HSA every single year. I would basically exceed my deductible every year.
Would I still be glad that I had a high-deductible policy and an HSA?
Yes, I would. Really.
Add up the amounts and you'll see. $1,100 per month equals $13,200 per year. If the deductible is $250, I'd have to pay that too (if I was so sick) so the total would be $13,450.
With the high-deductible policy, $175 times twelve months equals $2,100 in premiums. Add a high-deductible of $5,000 and you've got a total of $7,100.
This means that, in my worst year I would still save $6,350.
What about in a healthy year? I would save $11,100. That's like two all-expenses-paid vacations a year!
Or, in my case, that's a ton of yoga classes, visits to a naturopath, polarity therapy, massages and reflexology sessions.
Do the math for your own family. You will be surprised. I teach this stuff in classes and there are often people who suddenly blurt out "I never realized that!" and I can just see them scurrying to their insurance agents after the class to make the changes and sign up for an HSA.
Health Savings Accounts are a wonderful tool to help you save money on insurance. They are available today! See your insurance agent, bank or financial advisor for details.
Daryl Kulak is the author of the book "Health Insurance Off the Grid - A Wonderful Way to Use Alternative Medicine and Save Money on Insurance Using the New Health Savings Account (HSA)." The book provides a nine-step plan to get your self-employed or small business health insurance costs under control using a unique approach you won't find anywhere else. The book is available for sale as an e-Book or paperback at the Website http://www.healthoffthegrid.com
Life Insurance Benefits
Life Insurance is a legal contract between you and a life insurance company with the purpose of providing an income to spouse, children or other beneficiaries in the event of your de...(related: Insurance)
Motor Vehicle Accident Insurance Claim Guide
This is a FREE Insurance Claim GuideYour "Motor Vehicle" can be a truck, car, motorcycle - - you name it! If it's powered by a motor and has one, two, three, four (or even more) wheels this "Guide" is for you.The information below is a bare-bones "Guide" for those who have had such a motor vehicle accident. It details the basics of how one should with their property damage and/or personal injury claim.AFTER IMPACT CHECKLISTWe heartily suggest you make a copy of this "Impact Checklist" to be kept handy within the confines of your motor vehicle. A "Guide" to refer to so you'll be certain, should an accident take place, that you've covered everything.Other than the fact that one must obta...(related: Insurance)
Car Insurance Discounts
Trying to save money wherever you can is important to us all. Insurance should be no different. Do not assume that your agent knows everything about you and your vehicle. CarInsurance.com goes out of their way to find all the possible discounts that are available to each customer.Drivers should take advantage of all discounts that many providers offer, that can significantly reduce the cost of car insurance. Understanding discounts and how they can...(related: Insurance)
How To Negotiate A Settlement With An Insurance Claims Adjuster
You and I. M. Strong, the adjuster from Granite Mountain Insurance, are sitting at your kitchen table in an attemp...(related: Insurance)
Health Insurance Providers Online - Benefits To Applying Online
Health insurance providers are going online to find new customers. As a result, there are more affordable health insurance options for families, the self-employed, and small b...(related: Insurance)
Health Savings Accounts (hsa): How Do I Tell A Good One From A Bad One?
The Health Savings Account (HSA) is becoming well-known as an incredible tool to reduce health insurance premuims and yet provide good security for healthcare emergencies.But what should consumers watch out for? Are there good HSAs and bad HSAs?The answer is "not really." All HSAs are made to be quite similar, by federal law. They must conform to the national standards.However, there are some subtlies that differentiate HSAs as, not good or bad, but maybe good and better.The first thing to ask about an HS...(related: Insurance)
Talking To Your Parents About Insurance
Who can you talk to about auto insurance? Insurance agents are a good source. However, due to their life lessons, their love, and their own f...(related: Insurance)
Car Insurance Online ? Benefits Of Applying For Auto Insurance Online
Drivers are applying for auto insurance online not just for the convenience of comparing quotes, but also to find the best insurance rate. The benefits also include discovering new discounts and not being locked into a long term relationship with an insurance company.Comparing QuotesBefore the internet, getting real quotes from auto insurance companies was difficult. But, now with a few clicks of a mouse, you can get instant access to insurance quotes based on the coverage you choose. Online insurance sites also allow you to look at the details of each plan, so you can compare the quality of coverage as well as the price.Finding DiscountsYou can reduce your auto insurance p...(related: Insurance)
Health Savings Accounts (hsa): Do They Vary From State To State?
The Health Savings Account (HSA) is an amazing tool that a lot of people have been talking about. It is meant to help you save money on insurance and make your life simpler, maybe even help you be healthier.Is this tool available in all states? And are HSAs in each state the same?The Health Savings Account (HSA) was passed in the U.S. Congress in December 2003. It was signed by President George W. Bush. That means it is a federal law. The HSA is availa...(related: Insurance)
How Does Credit History Affect Car Insurance Rates?
Many personal car insurance companies consider your credit information when determining how much premium to charge for your insurance. So if you are calling around for new car insurance, keep in mind that many insurers are ...(related: Insurance)