In 2003, Congress created a help for medical and dental bills that is a tremendous tax savings, but five years later, very few people know about them. A Health Savings Account (HSA) is a special tax-free savings account that is available to people who purchase high-deductible insurance plans. To qualify, your insurance plan must have a deductible of $1,300 for a self-only coverage plan, or $2,600 for a family coverage plan.
With a Health Savings Account plan, you’ll save significant amounts of money annually on taxes, health insurance premiums and retirement savings all at the same time. All of this can be accomplished without decreasing your real insurance protection or choices of doctors & specialists. High deductible medical insurance plans are offered by almost all major carriers, and their monthly insurance premiums are usually less than one-half of standard plans. They begin offering benefits once the $1,000 deductible is met. The coverage of the plans vary, but they all have catastrophic care.
By placing the money that you save on insurance premiums in the HSA, you save to meet your deductible, and if your medical expenses for the year aren’t enough to meet the deductible, the money stays in your account – to cover medical expenses you want. Like an IRA, the money can rollover at year end and earn tax-free interest.
An individual can contribute up to $3,350 in 2016; a family can contribute $6,750. If someone in the family is 55 or older, those amounts can be increased by an additional $1,000. You can use money placed in your HSA for medical bills, dental work for your entire family, eye care and a host of other eligible medical expenses.
Dr. Moorhead and his team write about dental news, and answer patient questions.