Health Savings Account - HSA's

Ohio Health Savings Account Basics

Compare HSA quotes to traditional plans

Insurance Shoppers has been helping Ohio save money on their healthcare expenses with MSA's (Medical Savings Account's) for a long time. Then, starting January 1, 2004 (when the new HSA law took effect), this option became a lot more popular with new plan options. HSA's (Health Savings Account's) are similar in nature to MSA's, but HSA's have much fewer restrictions.

What is a Health Savings Account?

HSA's are a lot like IRA's, except that money is used to pay for qualified health care costs.* HSA participants enroll in an inexpensive high deductible health insurance plan. Then, a tax deductible savings account is opened to cover current and future medical expenses. The money the participant deposits, as well as the earnings, is tax-deferred. The money can then be withdrawn to cover qualified medical expenses tax-free, with unused balances rolling over from year to year.

What is the difference between an MSA and an HSA?

HSA's are an improvement on the old MSA program. HSA's can provide all of the following that MSA's didn't:

• Everyone in Ohio with a qualified high deductible plan is eligible to participate
• HSA's can be permanent and portable
• Larger tax-deferred contributions are allowed
• More deductible options
• HSA's can be funded by your employer, by the employee, or by a combination of both

The 2 parts of an HSA plan...

Part 1: The Qualified High Deductible Health Insurance Policy
For 2006, a high deductible insurance plan is a health plan with a minimum deductible of $1,050 for self-only coverage and $2,100 for family coverage, which are still relatively low. The maximum out-of-pocket expenses for allowed costs must be no more than $5,250 for self-only coverage and $10,500 for family coverage. This health insurance plan is almost identicle to a normal health insurance plan and may be purchased without the savings account if you want. By doing this, you would just have a high deductible health insurance plan with relatively low premiums.

Part 2: The Tax-Exempt Individual Savings Account
The savings account is designed to cover routine medical expenses and provide savings. In any given year you may deduct the amount you contribute into your HSA from your gross income. If your employment situation changes, you can still keep all of the money in your HSA, even if your employer contributed to the plan. You may spend the money in your HSA on anything the IRS Publication 502 considers a legitimate HSA health insurance expense. There are many alternative treatments, dental, vision, and quite a few surprising expenses which are considered legitimate.

Don't put it off!

By setting up an HSA now you can start accumulating literally hundreds of thousands of dollars by the time you retire in your account. This is money that would have gone to the insurance company, but instead was put into your custodial account. When you compare HSA premiums to the price of a typical Colorado health insurance plan, you will really see how much you can save.

Let us get you started NOW

If you have been putting off getting an HSA, we will make it easy for you. All you need to do is request HSA's Ohio information and we will do the work for you. HSA premiums are significantly lower than traditional fully-insured plans with co-pays and low deductibles. The money saved on premiums may be used to fund the health savings account. In any given year, there is a good chance that the deductible won't be met, so the money left over in your account is yours to keep. And, you still have very low exposure because once you meet your deductible, the insurance company pays your medical expenses.

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*See IRS Publication 502 for a list of qualifying HSA expenses. All terms and conditions of coverage, including benefits and exclusions, are contained in the certificate, which shall control in the event of a conflict with this overview. Insurance Shoppers are not engaged in rendering tax, investment or legal advice. Federal and state regulations are subject to change. If tax, investment or legal advice is required, seek the services of a licensed professional.