With every new year comes increased amounts that health savings account owners may contribute to their plan. HSA’s contribution amounts will differ depending on whether the insured is enrolled in an individual, family plan or group plan.
It is important to note that there are several ways to fund health savings accounts and all funds do not need to be deposited at once. Assuming the account has been setup, funds can be deposited retroactively.
The individual contribution limit for 2009 is $3,000 while families can contribute as much as $5,950. These dollars can be used to pay for a variety of qualified medical expenses including doctor’s office visits, prescription drug coverage, dental bills, meeting the policy deductible, co-insurance, as well as several other items. The IRS furnishes a list of qualified medical expenses at their website.
All insurance companies offer health savings account qualified plans. Typically, the health insurance has a higher deductible and lower premiums. The insured can contribute to their HSA account each year and write that amount off of their income taxes – much like an IRA contribution. The HSA will grow tax deferred and dollars spent on qualified medical expenses are withdrawn tax free.
Typically, this type of insurance is appropriate for consumers who desire lower premiums and are also comfortable with more out of pocket expenses. The insurance company usually covers expenses at 100% after the deductible has been met.
Category: Health Insurance