UNDERSTANDING HEALTH PLANS &
HSA SAVINGS ACCOUNTS (HSA)
The idea of the HSA plan is to buy a lower cost catastrophic medical plan, then take the monthly savings (over more expensive plans) and put it into a Health Saving Account at a bank. The HSA contributions are pre-tax. If you don't use the funds you contribute, they roll over to the next year.
Part 1: The HSA-Eligible Medical Plan
Before you can open an HSA account at a bank, the law requires that your medical plan design be considered 'HSA Eligible'. Any plan with "HSA" in the name is a qualified plan. All plans cover only Preventative Services prior to meeting the annual deductible. Mostt other services are subject to first meeting the deductible.
For 2017 the Providence 2800 is one of the richest medical plans on the market ($5000 maximum out of pocket), and the Providence HSA6000 plan is one of the least expensive. I offer HSA-Eligible plans from Regence and Kaiser as well.
Part 2: The HSA Savings Account
Personally I have the Providence HSA6000 plan and my HSA account is at Key Bank. I know Key Bank and Advantis Credit Union offer HSA accounts, as does the online bank www.hsabank.com With this option you get a debit/credit card and can pay for out of pocket medical, vision, dental, rx, alternative care, and more. There are annual limits as to how much you can contribute on a tax advantaged basis.
MY OWN EXAMPLE:
In 2015 I had an HSA-eligible Lifewise Plan for myself and my wife. I contributed $6600 each into our HSA Accounts at Key Bank. Using TurboTax I determined that the $6600 I had contributed was an adjustment on line 25 of my Federal 1040 form. The contribution saved me directly about $1800 on my Federal Taxes that I othewise would have paid. Your tax savings may be different from mine, so consult your tax advisor to see how contributing to an HSA would affect you. If you don't use the funds you contributed for the year, they roll over to the next year (unlike a Flexible Savings Account).
If you don't use the money in your HSA account will you lose it?
This is true of a Flexible Savings Account (FSA), not with an HSA. Your unused funds roll over each year.
How much can you contribute into an HSA account for 2017?
You can view the 2017 guidelines at the link below:
The idea is to use the medical plan for catastrophic medical expenses, then use the HSA account to pay for your out of pocket office visits, prescriptions, vision, dental, and alternative care expenses. You can even use HSA funds to pay for Long Term Care insurance. Rules are all subject to change.
FOR WHAT EXPENSES CAN YOU USE YOUR HSA ACCOUNT FOR?
To see a list of 2017 IRS qualified Medical Expenses, click on the link below:
Disclaimer: HSA information is subject to change. Please consult your tax advisor regarding HSA tax consequences, or the bank you intend to put your HSA money with. I am only competent to advise you on the medical portion of the plan.
For more information or to apply for coverage, please visit my link "Individual Medical" or call Dan Neils 503-650-4325
2017 HSA Plans Compared
Click filename below to access file