Health Savings Accounts What is a Health Savings Account(HSA)? A Health Savings Account (HSA) is a tax advantaged savings account, like an IRA, tied to a high deductible health insurance plan (HDHP). Your deposits into your HSA are tax deductible, your savings grow tax defered and can be withdrawn tax free to help pay your medical insurance deductible or other qualified medical expenses like prescriptions, vision or dental care. Health Savings Account contributions and interest earned carryover from year to year allowing you to build up your savings over time. You will never lose your savings or pay taxes as long as your HSA funds are used to pay for qualified medical expenses. If you elect to cancel your HDHP then you can no longer make contributions to your HSA, but you can continue to spend your savings on qualified expenses.   In order to set up an HSA it is required that you have a certain type of health insurance policy known as a High Deductible Health Plan or HDHP.  The Treasury Department stipulates that for 2010 a HDHP must have a minimum deductible of at least $1,200 for self-only coverage and $2,400 for family coverage. The maximum out of pocket allowed on a HDHP in 2010 is $5,950 for self-only coverage and $11,900 for family coverage. The Treasury Department has published an HSA Brochure for some additional information. For a more detailed description of Health Savings Accounts read All About HSA'S. Savings with a HDHP compared to a traditional PPO health plan? Plan example for a family: Plan Design: Family PPO Plan ($2,000 Ind./$6,000 Family Deductible, 70% Coinsurance, $40 office visit copay) Family HSA Plan ($5,800 Family Deductible, 100% Coinsurance, office visits discounted then subject to Deductible) Monthly Premium: $600 $400 Tax-deductible monthly HSA deposit (optional) not allowed $200 Total Monthly Cost $600 $600 Annual Cost For Health Plan $7,200 $4800 Annual Cost for HSA n/a $2,400 Annual Cost (premium for Health Plan plus HSA) $7,200 $7,200 Tax Savings (33% of HSA deposit)    $800 Total Cost of Health Plan and HSA account $7,200 $6,400 Your HSA account balance after one year (with no medical claims) None $2,400* If $3,000 of medical claims subject to the deductible are incured - out of pocket expenses for the claim. $2,300 $600 ($2,400 of claim is paid by the balance in the HSA account) Annual out of pocket expenses $9,500 $7,000 Annual Savings with the HSA Plan   $2,500                             Pay discounted Network fees with your HSA Dollars. With a High Deductible Health Plan (HDHP) you will gain access to a quality network of health care professionals and facilities in your area. Physicians and facilities in the network agree to a fee schedule which lowers the amount you pay for healthcare.  When you have any services rendered let the provider bill the insurance company to have the services discounted, then pay the balance to the provider with your HSA savings. All HSA administrators issue Mastercard or Visa debit cards that can be used to pay for your qualified expenses.   Savings will vary depending on the physician and the network and typically range from 25-40% off of the retail fees. Use you HSA savings to pay for qualified expenses including services not covered by your HDHP. Here are some examples of ways to use your tax free HSA savings for other qualified expenses that might not be covered under your HDHP. Dental treatment including braces and dentures. Vision care including exams, eyeware, contact lenses and cleaning solutions, and laser eye surgery. Chiropractic Care. Long Term Care Premiums (certain limits may apply). For a complete list of qualified expenses from the IRS see publication 502.  For a more detailed look at Health Savings Accounts and Tax favored plans please see publication 969. Will I ever pay taxes on money saved in my Health Savings Account? Money placed in your HSA is tax deductible. Your savings grow tax deferred and can be withdrawn tax free to pay for qualified medical expenses. There are limits on the amount of money you can place in your savings account. For 2010 the maximum for self only coverage increases to $3,050 and the family maximum contribution goes to $6,150. Iindividuals can make a one time transfer from their IRA to an HSA, subject to the contribution limits applicable for the year of the transfer. If you are age 55 or older, additional "catch up" contributions to HSA are allowed.  For 2010 it is an additional $1,000 and  will remain at $1,000 for all years forward.   Beginning in 2007 a special rule allows you to contribute the maximum amount for the year as long as you have a qualified High Deductible Health Plan (HDHP) in force by December.  However you must keep your HDHP in force for a minimum of twelve months for the IRS to allow the full contribution amount.  Contributions to the HSA in excess of the contribution limits must be withdrawn by the individual or subject to an excise tax. If a distribution is not used for qualified medical expenses, then the amount of the distribution is included as income, and there is an additional 10% tax.  The additional 10% tax would not apply when an individual dies or becomes disabled, or when an individual reaches age 65.  How do I get a quote for an HSA qualified High Deductible Health Plan (HDHP)? Click here for a free health quote. When you get to the quotes page look for the "Limit Plans By" search box and click "HSA" under plan type. All of the HSA qualified health plans will have the pink pig HSA logo next to the plan name. We represent several carriers including Humana One, United Healthcare, Assurant, Aetna,Coventry, Kaiser and Blue Cross.    When shopping for a HSA health plan it's important to know: Assurant and UnitedHealthOne offer "limited benefit" plans which offer lower premiums but limit or exclude coverage for certain services. Assurant offers the SaveRight HSA plan which limits outpatient coverage to $15,000 per year, and UnitedHealthOne offers the HSA Saver plan which excludes coverage for doctor office visit fees and prescriptions. These plans are priced well, but you might be better suited by selecting a comprehensive HSA health plan without these limitations if you were to get seriously ill or injured. Both Assurant and UnitedHealthOne also offer comprehensive HSA health plans without limitations. Aetna and Coventry offer embedded deductible HSA health plans. With an embedded deductible HSA health plan if any family member reaches the individual deductible before the family deductible is met, then the deductible is satisfied for that member.  All other carriers have family aggregate deductibles. With aggregate deductible plans when you insure two or more family members on one policy the family deductible must be met before the deductible is satisfied.    For maternity benefits to be included as a covered expense with a HDHP look at Blue Cross Blue Shield's HDHP's on a family contract, or Kaiser's HSA qualified plans. For a complete analysis and reviews on HSA health plans please visit our website Georgia HSA Plans. Health Savings Account Banking options. Once you have your High Deductible Health Plan (HDHP) in force you can then set up your Health Savings Account.     I would recommend checking with your local bank to see if they offer an HSA. That might make it easier for you to have all of your bank accounts with one bank.  Listed below are links to banks offering HSA's. For more information on HSA Banks please vist our website Georgia HSA Plans. Wachovia Bank of America BB&T  To research online banks click on the following links. HSA BANK OPTUM HEALTH BANK HEALTH EQUITY