Hyers & Associates

HSA’s are savings accounts which work in conjunction with high deductible health insurance plans. There are only a few restrictions to those looking to participate in these policies.  In order to be eligible for participation, individuals must purchase a health insurance plan with a $1,000 deductible while a family must purchase a plan with a $2,000 deductible.

The incentive is this: The deposits into and HSA are a tax deduction for the individual, family or the sponsoring employer. In addition, within the HSA, the funds grow tax-deferred and can be withdrawn for qualified medical expenses. Once the account is set up, the insured systematically deposits funds into a HSA. These funds are normally invested in a money market account, but can also be allocated to mutual funds. (In practice, a Health Savings Account works a lot like an Individual Retirement Account.)

The concept is to provide consumers with an incentive to obtain affordable health insurance while saving for medical expenses. A high deductible health insurance plan combined with a HSA can be less expensive to the consumer than a traditional health policy.