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Health
Savings Accounts (HSA)
is not health insurance. Rather,
it is a savings plan that offers an alternate way for
consumers to pay for their healthcare. HSAs enable you
to pay for current health expenses and save/invest for
future qualified medical and retiree health expenses on
a tax-free basis. Health Savings Accounts (HSAs) were
created by the Medicare bill signed by President Bush on
December 8, 2003. Changes to HSA took effect in
2011 under the Affordable Care Act.
Visit the IRS to review the changes.
In
order to open an HSA, an individual must be covered by a
High Deductible Health Plans
(HDHP). Sometimes referred
to as a “catastrophic” health insurance plan, an HDHP is
an inexpensive health insurance plan that generally does
not pay for the first several thousand dollars or more
of healthcare expenses (i.e., the “deductible”) but will
generally cover health expenses after that.
For
2006, in order to qualify to open an HSA, your HDHP
minimum deductible was at least $1,050 (self-only
coverage) or $2,100 (family coverage). The annual
out-of-pocket expense (including deductibles and
co-pays) for 2006 could not exceed $5,250 (self-only
coverage) or $10,500 (family coverage).
This is not a substitute for employers
who do not want to provide health insurance to their
employees.
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