Health Insurance is a very confusing issue for many people, especially as more and more employers offer the option of high-deductible plans with a health savings account (HSA).
High-deductible health insurance plans offer lower premiums but require higher deductibles be paid by the individual or family. It is not unusual for a deductible to be $5,000 or more per year.
To help pay for out-of-pocket qualified medical expenses as part of the deductible, health savings accounts (HSA) allow a participant to use pre-tax money that was contributed into a HSA. The contributions are usually taken from a paycheck.
In simple terms, the more money you put into an HSA the fewer taxes you will pay.
The advantage of having a HSA account is the account will stay with the individual and can be transferred even if jobs are switched.
Other types of account like Flexible Spending Accounts (FSA) usually have a "use-it" or "lose-it" provision yearly.
Pam Pawenski, Vice President of Sales for Univera Healthcare, said it is important for people to calculate ahead when planning to use health savings accounts (HSA). The amount to be deposited has to determined when an employee takes part in his/her health care re-enrollment period (usually in the fall).
Many health insurers, such as Univera, provide HSA calculators for enrolled members.
There are others available online. An example of an HSA calculator can be found here:
Some other tips for maximizing your money with high-deductible health insurance plans and health savings accounts:
-Make sure you take advantage of preventive care. Most high-deductible plans will cover those services at 100%
-Try to only use in-network doctors. High-deductible plans can have separate deductibles for in-network and out-of-network providers which could significantly increase your costs.
-Keep receipts for medical purchases made with your HSA and have one person in the family dedicated to tracking those expenses. Having multiple people tracking a HSA can lead to confusion and mistakes.
-Most importantly, try to put as much money as you can (up to the limit) into a HSA. The 2018 limit on contributions to a HSA is $6,900 for taxpayers with family coverage.
"Think of it as a health care IRA," said Peter Kates from Univera Healthcare.
Should you chose a high-deductible health insurance plan with a HSA - if you have the option?
7 Eyewitness News Reporter Ed Reilly has more in his report.