SB Informer
Wednesday, December 13, 2006; 03:06 AM
Health Savings Accounts (HSAs) received a boost this weekend when the U.S. Congress gave final approval to H.R. 6111, the "Tax Relief and Health Care Act of 2006". The additional incentives should greatly improve the popularity of HSAs, particularly among individuals and families purchasing their own health insurance, according to leading health insurance broker HSA for America.
"HSA plans are already the best health insurance value for just about
anyone who is paying for his or her own health insurance," said HSA for
America President Wiley Long. "They lower premiums, provide immediate
tax reductions, and make it easier to save for medical expenses during
retirement. These changes will result in HSA plans eclipsing co-pay
plans as the primary choice among small business owners, independent
contractors, and anyone who's self-employed or does not have
employer-provided coverage."
Health savings accounts are special tax-favored savings accounts that
anyone with a qualified high-deductible health insurance plan can open
and fund. Any money put in the account is tax deductible, and can be
used tax-free to pay for future medical expenses. If the money is not
withdrawn, it continues to grow tax-deferred like an IRA. HSAs first
became available in January 2004, and today nearly five million people
are covered by an HSA-qualified health insurance plan.
Long said that that the legislation contains several improvements to
the already popular HSA program that will make HSA plans the most
popular type of coverage in the near future.
* It allows people to fund their HSAs with a one-time transfers from
their Individual Retirement Accounts (IRAs). Because funds withdrawn
from an HSA to pay medical expenses are never taxed, an HSA is a much
more tax-advantaged investment than an IRA. This provision will enable
someone to quickly maximize their contribution, so that they can fully
cover the deductible on their high-deductible health insurance plan.
* The bill allows individuals with HSA-qualified policies to contribute
up to the annual contribution limit ($2,850 for individual coverage and
$5,650 for family coverage in 2007), even if their deductible is less
than this amount. Until now, policyholders with smaller deductibles
were penalized because they were not allowed the same tax benefits as
those with larger deductibles.
* Allows individuals to make the maximum contribution to the HSA,
regardless of when the HSA plan began. Taxpayers who purchase an HSA
plan later in the year will still be allowed to make the full HSA
contribution, instead of a pro-rated portion as is currently the case.
This will enable them to completely cover their deductible with funds
from the HSA if they have some large medical bills, and also gives them
the same tax benefits as someone who purchased the plan earlier in the
year.
"I expect very few people will continue to purchase health insurance
plans with co-pays once they understand how easy and inexpensive these
plans now are", said Long. "HSA plans can already reduce a family's
annual expenses by several thousand dollars.
Long says HSA for America, which markets HSA-qualified plans to
individuals and families, is currently expanding in anticipation of a
growing surge of interest in health savings accounts in 2007. "We've
already had a lot of people calling us about these changes, and have
started hosting weekly teleseminars to share this information and
answer questions from curious consumers."
The HSA for America teleseminar is offered to registered participants
at no charge. For more information about the Health Savings Account
Teleseminar and how to sign up, visit: http://www.health--savings--accounts.com/teleseminar.htm
About HSA for America
HSA for America is the nation's leading independent health insurance
firm specializing in individual and family coverage that works with a
Health Savings Account. Through our comprehensive website we offer
complete information on HSAs and qualifying health insurance plans. We
offer instant quotes, online health insurance applications, and access
to several banks that can act as an HSA administrator for your account.
Visit http://www.health--savings--accounts.com for complete information.