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Meeting Your Family's Health Needs With An HSA
Making sure that your family is able to stay healthy partly depends on having a good health insurance program for them. One of the more recent new additions to the health insurance industry is called the Health Savings Account (HSA). This new program enables you to have reduced insurance rates because of a higher deductible, and a tax deferred savings program with it. Here are some of the features of this program.
Reduced Rates
By getting a health insurance program with a high deductible, you are able to greatly reduce your monthly premiums. This is an especially good way to go, if you are younger and currently have pretty good health. The deductible amounts are pre-determined by the government, and you are required to have deductible amounts between $1,050 and $5,250 for singles, and it needs to be between $2,100 and $10,500 for families.
Savings Are Tax Exempt
One of the great benefits of this type of plan is that, like an IRA, you enjoy tax-free income, and interest on the amounts you have in the program. You can put into the plan money that comes off the top of your taxes. There are limits, though, and for singles it is up to $2,700, and for families it is $5,450. A little extra benefit is that you are able to take off of your taxes any money that is deposited into the account all the way up to April 15th. So, if you are coming up to tax time, and find you need to reduce your taxes some more, you can put it into your HSA, and find the tax break you need.
Better Coverage
The new HSA's have an extra real nice feature - they cover more. Some things that you may not have been covered for under another type of policy, you may find that you are covered for with an HSA. This could actually allow you to get a better coverage for less. Things like dental coverage, therapy, even non-prescription medicines and some alternative treatments may also be covered, and even some mental illness treatments, too.
You Keep Control
Under an HSA, you are the one in control of the money. It is yours to use. You can take money out of the account when you want, but only the money that is used only for medical purposes is tax-exempt. Generally, you will be given a card, like a credit card, that gives you access to the account. Whenever you use money from the account, the insurance company automatically gets a receipt, and it is subtracted from your account, and your deductible - and it remains tax exempt.
Like any other insurance policy, once you have paid the deductible amounts, the rest is up to the insurer to pay. By having the high deductible you reduce the premiums considerably. The savings account can also provide a good hedge for your medical insurance program for the future, too, because any money not used toward the deductible remains your money to use next year, if you need it. On the other hand, the money in your HSA might also be used to provide some money for retirement - assuming you maintain your good health.
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