Families who aren’t covered by a health insurance policy often live in fear of illness or injury. Small medical bills are an inconvenience, and major medical bills can be catastrophic to a family’s finance. Are you destined to just remain at the mercy of your medical expenses?
Of course you aren’t! If you aren’t covered by a health insurance policy, you should consider opening a health savings account for you and your family. These tax-sheltered savings accounts allow you to save money to pay for those expenses and enjoy a few benefits along the way.
Deposits to health savings accounts are deductible from your taxable income whether you itemize your deductions on your income tax return or claim the standard deduction. In 2009 a single person is allowed to contribute as much as $3,000 while families are allowed to contribute $5,950. Withdrawals from these accounts are not taxable as long as they are used to pay for qualified medical expenses such as deductibles, prescriptions, or even over-the-counter medications.
A nice perk of health savings accounts is that they don’t have to be depleted by the end of the year like contributions to an employer-sponsored medical reimbursement account does. Remaining balances from year to year can be carried forward into the next year. This flexibility allows account holders to deposit as much money as they’d like (staying within the IRS allowances) without worrying that they will lose their money.
Portability is another important perk of health savings accounts. Since these accounts are not provided through the account holder’s employer, changing jobs is never a problem. In fact, the health savings account provider won’t even know that the account holder has moved to a new job until the account holder tells him.
In addition, employers who do have healthcare coverage through their employers, but who also have to meet a high medical deductible before their coverage provides any benefit, can enroll in a health savings account. They can, then, use their account to save for that pricey deductible. Current IRS guidelines define a high deductible health plan as a plan having a deductible of $1,150 for single folks and $2,300 for families.
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Health savings accounts are a great alternative or addition to any insurance plan. We used a HSA and maxed it out every year. We didn’t realize how much money we were spending on medical bills until we contributed and saw in black and white what we spent every year. It was good because now it leads us to make more prudent choices on healthier living so we don’t HAVE to go to the doctor as much.
Jerry
http://www.leads4insurance.com
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