What is an HSA?

December 9th, 2009 by Lloyd Pro Group Inc.

If you are looking to save on your Atlanta health insurance and would like to save money on your income taxes then you need to learn about the “HSA” program. “HSA” simply stands for a “health savings account”.

It is a tax-advantaged medical savings account that is available to U.S. taxpayers that are enrolled in a High Deductible Health Plan (HDHP). In other words the money you save on your high deductible Atlanta health insurance policy you use to fund your HSA for when you really need it later. Why would anyone want to do this?

Point # 1: Use “pre-taxed” income

Well, first of all the money that you contribute to the account isn’t taxed by the government when you deposit it. In other words you get to use “pre-taxed” income to fund your account.

Point # 2: Guess what? It rolls over!

Another good thing about the HSA is that your funds roll over from year to year if you don’t need them this year. This is very different from the “use it or lose it” “FSA” (Flexible Spending Accounts) that are available today. plus it grows tax free!

Point # 3: It’s yours and you control it

You own and control your own HSA, this is very tdifferent from the “HRA” (Health Reimbursement Arrangement) that some companies offer their employees.

Point # 4: Think IRA… but for medical costs

Just as IRA’s help you to save for retirement an HSA helps you to save for medical expenses for when you need them later. Your funds grow tax free just like an IRA, so if you use them after retirement you will get the tax advantage of being taxed at a lower rate. Don’t forget that if you use them for non-medical expenses before age 65 you will incur a 10% penalty.

Point # 5: Get your employer to chip in

Either an individual or an employer can contribute to the HSA. The good thing is that once the funds hit your account they are yours to keep and grow tax free.

Point # 6: Tax free medical costs

As long as you use the funds in your account for approved medical expenses you will pay no federal tax on the money that you use! Just remember that if you use it for non medical expenses you will be penalized. However it is still your money to use when you need it.

Point # 7: Catastrophic protection

Since you have a high deductible insurance plan you are protected from catastrophic illness and hospital bills.

Point # 8: Choose your own doctors

Since you will be paying for your own doctor visits out of the HSA you get to choose any doctor that you like. No more worry about being out of network!

Lloyd Pro Group a Duluth Ga Nationwide Insurance agency has been helping families to protect what matters most with Georgia insurance since 1985. Lloyd Pro Group can be reached at (770) 381-5000 or at their website at http://www.lloydprogroup.com

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