Health Savings Accounts  

 
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Health Savings Accounts in California

A California Health Savings Account (HSA) is a savings account (tax-favored) that allows you to allocate funds to cover medical expenses, all the while being tax-deductible.  In order to receive the benefits of a California HSA, you must pair it up with an HSA qualified insurance plan that is considered "high-deductible".  You can find these insurance plans in abundance through various insurance companies throughout California.  Simply run an instant quote to see available plans in your area. 

To be considered an HSA qualified California health insurance plan, the insurance plan generally has to have deductible amount between $1,200 - $5,900 for plans covering individuals, and between $2,400 - $11,900 for family plans.  Once you have signed up for a qualified California HSA-compatible plan, you can start funding you Health Savings Account and receive the tax benefits.

Here is how a Health Savings Account works for you:

  • A California HSA allows you to avoid federal income taxes on deposits up to $3,050 for individuals and up to $6,150 for family plans.  There is no minimum deposit to be made on your HSA.  Anything that is deposited into your HSA, before the date of April 15th, is considered an "above the line" deduction in taxes for the previous fiscal year.  You receive deductions for amounts placed into your HSA, even when you choose not to take standard deductions, or don't itemize the deductions.  This tax benefit is available to everyone, regardless of amount or the source of income.

  • After you have received tax-deductions from the placing of funds in your HSA account, you are still eligible to spend the money, tax-free, on qualified medical expenses.  This includes any expenses from seeing a doctor, prescriptions drugs, or other expenses geared towards your deductible.  You may also withdraw money to cover other expenses that would otherwise not be covered by a health insurance policy.  These expenses include:

    • Dental costs:  generally, dental riders are very limited in coverage in most health insurance plans, but in conjunction with the funds in your HSA account, you can use the money to cover necessary dental procedures, including braces.
    • Mental therapy:  HSA funds can be used to cover charges accrued through psychiatrists, psychologists, psychoanalysts, psychotherapists.
    • Physical therapy
    • Alternative treatments:  California Health Savings Accounts can cover expenses accrued through the use of acupuncture, aromatherapy, homeopathy, traditional Chinese medicine, nutrition consultation, and other healing services.
    • Transportation:  included expenses accrued while being moved or lodged related to health care.
    • Preventive health
    • Nonprescription medication
    • Special Disability fees:  all costs accrued while accommodating handicapped individuals for any sort of disability.
    • Maternity expenses
    • Insurance premiums:  costs that help pay for long-term care.
    • You can see a complete list of HSA Qualified Expenses at HSA for America.

  • In order to receive a tax break for the current year, you must have a California HSA-qualified insurance plan in place by the 1st of December.

  • If the California HSA-qualified health insurance plan is cancelled prior to one full year's coverage, the amount of your maximum contribution is pro-rated depending on the number of months you have had coverage.

  • A one-time roll over is allowed from an Individual Retirement Account (IRA), a Health Reimbursement Arrangement (HRA), or a Flexible Spending Account (FSA) into your Health Savings Account.

  • In the event that HSA contributions are made by an employer, it is considered "excluded" from your income and, therefore, not subject to FICA or income taxes.  This kind of contribution reduces federal income tax dues for the fiscal year.

Health Savings Account Information

A California Health Savings Account is the only fiscal investment that allows a tax deduction as well as tax-deductible withdrawal.  Health Savings Accounts help you save on insurance premiums and income taxes because they are paired with a high-deductible health insurance plan.  Thus, your premiums are lower, possibly saving you $5,000 a year when combined with your tax-free deductions.

Health Savings Accounts also appeal to California individuals and families concerned with keeping themselves healthy.  For instance, if you accrued no medical expenses, the money in your HSA that is not used to pay medical expenses is yours to keep and is free to mature without federal taxes.  If funds are withdrawn for medical expenses, they remain free from federal taxes, however, if at any point money is withdrawn for something other than medical expenses before the holder of the account is age 65, taxes will be levied on the amount withdrawn.

What makes an HSA so financially savvy is the investment opportunity it presents and the potential return you can receive depending on interest rates and how much of your deposit is used to pay medical bills.

Health Savings Accounts are a relatively new addition to the world of healthcare.  Here's how you, and the insurance business can benefit:

  • It allows the consumer to decide how to spend their health care money as opposed to letting insurance companies decide - putting both responsibility and choice into the hands of consumers.  People can seek out the best deals and values for their medical expenses establishing an atmosphere of competition in a market that has become counter to financial efficiency.

  • It puts a sense of pro-activity and responsibility into the consumer hands by giving direct benefits to those that stay healthy - both by letting people keep money they don't spend and also by allowing preventive care costs to be covered by Health Savings Accounts.

  • It gives freedom to the consumer to seek out alternative methods of improving their health by allowing them to spend money where they see fit.  This inspires innovation on the part of the insurance companies to provide their customers with more personalized care that attends to the individual.

How to Choose a California Health Savings Account

In order to choose the HSA and qualified health insurance plan that best fits you individual situation, review the information posted on this page and feel free to contact us for further information.  You can then run an instant quote to find the available California HSA plans available in your area, review the plan details, compare the plans, and apply online.

Health Savings Accounts in the News

Health Savings Accounts Surpass $10 Billion in Total Deposits
MINNEAPOLIS--(BUSINESS WIRE)--Health Savings Accounts HSAs Surpass $10 Billion in Total Deposits according a survey and research conducted by Devenir

What Happens to a Health Savings Account with Medicare Coverage, Explains GoHealthInsurance.com
Consumers who use Health Savings Accounts (HSAs) and will soon be eligible for Medicare should be aware of certain changes. Chicago, IL (PRWEB) February 12, 2011 In the past few years, Health Savings Accounts (HSAs) have been gaining ground in the industry with millions of consumers enrolling in health plans compatible with the tax-free savings accounts. And now with the Baby Boomer generation ...

Rep. wants health savings accounts for state workers
State Rep. Richard Hollington has introduced legislation that would allow Ohio to offer health savings accounts to state employees, including elected officials.

UMB achieves 35% increase in health spending accounts
UMB Healthcare Services, a division of UMB Financial Corporation, announced today that it has achieved a 35 percent increase in the number of its health spending accounts.

UMB Announces 35 Percent Increase in Health Spending Accounts
KANSAS CITY, Mo.--(BUSINESS WIRE)--UMB Healthcare Services, a division of UMB Financial Corporation (NASDAQ: UMBF), announced today that it has achieved a 35 percent increase in the number of its health spending accounts.

UMB Announces 35 Percent Increase in Health Spending Accounts
UMB Healthcare Services, a division of UMB Financial Corporation , announced today that it has achieved a 35 percent increase in the number of its health spending accounts. The company now services 1.8 million health spending accounts, including Health Savings Accounts , Flexible Spending Accounts and Health Reimbursement Arrangements .

Assets Held in HSAs Soar: UMB
UMB Healthcare Services announced on Tuesday it has had a significant increase in the number of health spending accounts and expects even more in 2011.

Bill would allow flexible spending accounts
Military families could take advantage of flexible spending accounts that provide tax savings for health care and child care expenses under new legislation introduced in Congress.

THE TOP 10 HEALTH BENEFITS TRENDS THAT WILL SHAPE 2011
There's nothing like limited resources to inspire creative thinking. advantages-namely, the elimination of the "use it or lose it" rule.

Trotter Wellness® and HSA Bank® Partner to Form an Integrated Health Savings Account and Wellness Solution
Trotter Wellness® and HSA Bank® have created a fully integrated Health Savings Account (HSA) and Wellness Solution that will reduce health care costs for organizations nationwide. (PRWeb February 11, 2011) Read the full story at http://www.prweb.com/releases/2011/02/prweb5056134.htm

 

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