Individual Family and Group
 Health Savings Accounts

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HSA's for California Individuals and Businesses

www.plansforhealth.com and River Rock Insurance Services Inc. are proud to offer assistance getting you enrolled in a Health Savings Account compatible insurance plan in combination with answering your questions in determining the right Health Savings investment Account Administrator for you.

What is a Health Savings Account strategy? 

President George W. Bush’s administration created the Health Savings Account legislation through a Medicare reform bill in 2003.  The Health Savings Account strategy is the combination of a high deductible health insurance plan and a completely separate investment account where individuals and employers can contribute cash up to certain limits tax deductible to be used on qualified medical expenses.  For a list of deductible size limitations and requirements on capped contribution amounts both for individuals and families you can always cross reference the IRS Publication to receive the latest and greatest figures.

Why is a Health Savings Account strategy advantageous to me?

If you are like half the population and use your health insurance plan very infrequently, perhaps just an annual physical once a year or a prescription for a cold or flu, a Health Savings Account could be a great way to save money and stash cash away for retirement.  The high deductible health insurance plan starts saving you money by reducing your monthly premiums.  All of your medical expenses on Health Savings Account plans apply to your deductible and annual out of pocket maximum with the exception of preventative care.  For a list of preventative care inclusions, guidelines, and qualifications you can review our overview here.  You are in effect self-insuring your small and medium bills until your deductible is paid.  But, if you’ve reduced your monthly premiums hopefully in half then paying these small medical bills out of pocket should still result in a dramatic overall savings.    Now, here’s the good part...each year you can contribute up to certain limits tax deductible cash contributions to spend on qualified medical expenses.  

How are the Health Savings Account contributed funds treated?

The tax deductible funds contributed to the Health Savings Investment Account have a very advantageous position.  You can roll your money over year after year, accumulating interest on a pre-tax basis.  The money can be spent on qualified medical expenses without penalty.  Once you turn 65 and over you can even use the cash for Medicare expenses and Medicare premiums.

What if I change my health plan?

You might find yourself in a position of employment change perhaps, or earning access to a new health plan through your spouse.  If this is the case and you disenroll from the Health Savings Account compatible health plan you can still use the funds previously contributed to the account for qualified medical expenses without penalty.  You cannot, however, contribute any new tax deductible cash to the HSA investment account until you are back on a compatible health plan.

What about all my prescriptions? 

Prescription drugs, unfortunately, apply to the deductible on a Health Savings Account plan so you have you pay all your prescriptions out of pocket at 100% cost until your deductible is met.  If you take brand medications monthly you may not save any money overall as you may spend all of the account funds monthly for your prescription costs.

Feel free to contact us anytime with questions about Health Savings Accounts and whether or not it’s right for you.

 

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