| Is a Health Savings Account RIGHT for YOU??? HSAs were authorized under the Medicare Reform Act of 2003 and were made available to consumers, beginning in 2005. Although HSAs offer major "premium" savings, they're NOT for everyone - especially those who prefer a medical plan with low Deductibles ($1,000 or less), and/or covers most of the costs for Routine Wellness Care, Diagnostic, Prescriptions, etc. HSAs were designed and are best suited for the cost-conscious healthcare consumer who prefers to utilize every opportunity to assume control, management and responsibility for their healthcare expenses by taking full advantage of professional healthcare advocacy services offered by their insurance carrier and the 100% tax-deductibility for all out-of-pocket (OOP) medical expenses. HSAs have "come of age" in today's consumer-driven healthcare market primarily because 30-50% of your premium dollars remain in your HSA account for low-end expenses, while your insurance company assumes 100% of the responsibility for large ($3,000-$5,000 or higher) expenses, depending on selected deductible. Unlike the waning Medical Savings Accounts popularized in the '90s that were essentially a "use it or lose it" proposition, unused calendar year HSA deposits roll over to the next calendar year, etc., etc. Any funds remaining in the HSA at retirement can supplement your retirement income, as an annuity. You are probably NOT a candidate for an HSA if: 1. your ANNUAL OOP expenses (including wellness care, dental, optical, prescriptions, total less than $1,000. (While some consumers have the financial means to utilize additional Wellness and Preventive Care (such as health screenings), annual physicals, dental & vision, for some reason they choose not to - even though a 100% tax deduction can be declared) OR, 2. you have little or no interest in assisting your insurance carrier with "cost accountability" measures by your healthcare providers, as the Advocacy Program is an integral "cost-control" benefit of most HSA programs. Your CPA may, or may not recommend consideration of an HSA. If so, your medical expense records should clearly validate the recommend. More and more CPAs are getting licensed to write insurance products that offer them. Whether a question regarding conflict of interest will arise, remains to be seen. |
Frequently Asked Questions (FAQs) about Health Savings Accounts
Q. What is an HSA?
A. Ofter referred to as a Medical IRA, an HSA is a tax-favored, interest-bearing savings account which allows
funds to be accumulated to pay for your current and future qualified health care expenses. It helps you save
money tax free, lowers your premium costs, and may also nudge you into a lower tax bracket.
Q. How much can be contributed to an HSA?
A. As of January 1, 2010, the maximum contribution for a single person is $3,050. The maximum contribution
for a family is $6,150. The minimum Individual Deductible is $1,200 and the Family Deductible is $2,400.
As of 2009, an additional $1,000 "Catch-Up" contribution option is available for persons over age 55, and up
to an additional $1,000/yr thereafter.
Q. What happens to the HSA balance at the end of the year?
A. Unspent HSA funds roll over each year and belong to you. There is no "use it or lose it" provision with
HSAs. These funds can continue to be used for qualified medical expenses, along with any new contributions.
Q. What can I do with the funds if they are never used?
A. At age 65, the unused funds may be rolled over into an IRA, used to: a) Pay your Medicare supplement
and/or Long Term Care premiums, b) Deductible, or c) Supplement regular income (subject to taxes).
Q. Who/What is an Account Custodian?
A. You have the freedom of to designate your Insurance Carrier, or almost any Financial Institution as your
Custodian, but be sure to inquire about any fees related to the maintenance of your account.
How To Use an HSA Account
Most Account Custodians offer a free HSA Visa® Debit Card that can be used to conveniently pay for
prescription drugs, at point of service and for other medical expenses.
Visa Debit Card Q & A
Q. What can I purchase with my card?
A. Use your Health Savings Account Visa debit card to pay for qualified medical expenses. It should only be
used at health-related locations.
Q. What happens if my healthcare provider does not accept Visa debit cards?
A. Your HSA Account Custodian may also provide a checkbook as another convenient way to pay providers.
Q. What are qualified medical expenses?
A. Typical expenses include:
• Insurance deductibles, co-pays, and other eligible expenses not covered by insurance
• Hospital charges
• Prescription drugs
• Medical supplies
• Over-the-counter drugs
• Eyeglasses, contact lenses, solutions and eye surgery
• Vitamins, dietary supplements, weight loss drugs if approved by your doctor
• Dental services, orthodontics and psychologist's fees
• Smoking cessation programs and related over-the-counter drugs
Q. Can I use my card to buy healthcare related items from Internet merchants?
A. Yes, as long as your purchases are for qualified healthcare expenses.
Q. Is this card like other Visa debit cards?
A. No, the HSA Visa debit card should only be used for qualified healthcare expenses. This card can only be
used at healthcare-related merchants & providers that accept Visa debit cards.
Q. What if my card doesn't work at the point of sale, or the cashier tells me my
transaction has been declined?
A. You may be required to pay with another form of payment. The decline could be due to any of the following
reasons:
1. Your purchase wasn't considered a qualified medical expense under your health savings account plan.
2. Your purchase has non-qualified items, remove these items, then try your purchase again with only
qualified items.
3. Your Health Savings Account balance was too low to cover the transaction.
Q. What if I don't have enough funds in my Health Savings Account to cover the
qualified medical purchases I want to make?
A. Your transaction will be denied if there are insufficient funds in your account. You can either use a different
payment method and submit a claim for reimbursement, or tell the cashier how much you want to pay for part
of the transaction with the funds remaining in your account, and pay for the balance using a different payment
method.
Q. Can I withdraw cash from an ATM with my Health Savings Account Visa debit card?
A. No. The card should only be used for qualified healthcare medical expenses. You cannot access cash with
this card from an ATM or get cash back from a merchant.
Q. When asked by a merchant or directed by a point of sale system to choose a payment
method, should I select "Debit" or "Credit"?
A. When making a purchase using a keypad or screen, select "Credit". The card does not have a PIN, and you
must sign for the transaction. If there's no keypad or screen, give the card to the merchant. When asked if you
want to make a credit or debit purchase, say "Credit". No PIN number is required.
Q. Do I need to save my itemized receipts?
A. Yes, it is always a good idea to save your receipts for tax purposes.
DO YOU HAVE A QUESTION ABOUT HSAs? EMAIL US.
Q. What is an HSA?
A. Ofter referred to as a Medical IRA, an HSA is a tax-favored, interest-bearing savings account which allows
funds to be accumulated to pay for your current and future qualified health care expenses. It helps you save
money tax free, lowers your premium costs, and may also nudge you into a lower tax bracket.
Q. How much can be contributed to an HSA?
A. As of January 1, 2010, the maximum contribution for a single person is $3,050. The maximum contribution
for a family is $6,150. The minimum Individual Deductible is $1,200 and the Family Deductible is $2,400.
As of 2009, an additional $1,000 "Catch-Up" contribution option is available for persons over age 55, and up
to an additional $1,000/yr thereafter.
Q. What happens to the HSA balance at the end of the year?
A. Unspent HSA funds roll over each year and belong to you. There is no "use it or lose it" provision with
HSAs. These funds can continue to be used for qualified medical expenses, along with any new contributions.
Q. What can I do with the funds if they are never used?
A. At age 65, the unused funds may be rolled over into an IRA, used to: a) Pay your Medicare supplement
and/or Long Term Care premiums, b) Deductible, or c) Supplement regular income (subject to taxes).
Q. Who/What is an Account Custodian?
A. You have the freedom of to designate your Insurance Carrier, or almost any Financial Institution as your
Custodian, but be sure to inquire about any fees related to the maintenance of your account.
How To Use an HSA Account
Most Account Custodians offer a free HSA Visa® Debit Card that can be used to conveniently pay for
prescription drugs, at point of service and for other medical expenses.
- Pay for prescriptions and other medical supplies and expenses.
- Is valid wherever Visa debit cards are accepted.
- Claim forms are not needed.
- No transaction fees.
- Monthly and Yearly account statements detail contributions and disbursements.
Visa Debit Card Q & A
Q. What can I purchase with my card?
A. Use your Health Savings Account Visa debit card to pay for qualified medical expenses. It should only be
used at health-related locations.
Q. What happens if my healthcare provider does not accept Visa debit cards?
A. Your HSA Account Custodian may also provide a checkbook as another convenient way to pay providers.
Q. What are qualified medical expenses?
A. Typical expenses include:
• Insurance deductibles, co-pays, and other eligible expenses not covered by insurance
• Hospital charges
• Prescription drugs
• Medical supplies
• Over-the-counter drugs
• Eyeglasses, contact lenses, solutions and eye surgery
• Vitamins, dietary supplements, weight loss drugs if approved by your doctor
• Dental services, orthodontics and psychologist's fees
• Smoking cessation programs and related over-the-counter drugs
Q. Can I use my card to buy healthcare related items from Internet merchants?
A. Yes, as long as your purchases are for qualified healthcare expenses.
Q. Is this card like other Visa debit cards?
A. No, the HSA Visa debit card should only be used for qualified healthcare expenses. This card can only be
used at healthcare-related merchants & providers that accept Visa debit cards.
Q. What if my card doesn't work at the point of sale, or the cashier tells me my
transaction has been declined?
A. You may be required to pay with another form of payment. The decline could be due to any of the following
reasons:
1. Your purchase wasn't considered a qualified medical expense under your health savings account plan.
2. Your purchase has non-qualified items, remove these items, then try your purchase again with only
qualified items.
3. Your Health Savings Account balance was too low to cover the transaction.
Q. What if I don't have enough funds in my Health Savings Account to cover the
qualified medical purchases I want to make?
A. Your transaction will be denied if there are insufficient funds in your account. You can either use a different
payment method and submit a claim for reimbursement, or tell the cashier how much you want to pay for part
of the transaction with the funds remaining in your account, and pay for the balance using a different payment
method.
Q. Can I withdraw cash from an ATM with my Health Savings Account Visa debit card?
A. No. The card should only be used for qualified healthcare medical expenses. You cannot access cash with
this card from an ATM or get cash back from a merchant.
Q. When asked by a merchant or directed by a point of sale system to choose a payment
method, should I select "Debit" or "Credit"?
A. When making a purchase using a keypad or screen, select "Credit". The card does not have a PIN, and you
must sign for the transaction. If there's no keypad or screen, give the card to the merchant. When asked if you
want to make a credit or debit purchase, say "Credit". No PIN number is required.
Q. Do I need to save my itemized receipts?
A. Yes, it is always a good idea to save your receipts for tax purposes.
DO YOU HAVE A QUESTION ABOUT HSAs? EMAIL US.
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T&T Marketing
Insurance and Adjuster Service
P.O. Box 84321
Lexington, South Carolina 29073
Phone: 803.808.6020
Insurance and Adjuster Service
P.O. Box 84321
Lexington, South Carolina 29073
Phone: 803.808.6020
We can tailor a High-Deductible Health plan for
Individuals and business with options from $1,200 to
$10,000.
Employers can enjoy a 100% tax credit for any shared HSA
contributions.
Employees can even choose which deductible is best for
them.
Individuals and business with options from $1,200 to
$10,000.
Employers can enjoy a 100% tax credit for any shared HSA
contributions.
Employees can even choose which deductible is best for
them.
| Note: The HSA must be tied to a high-deductible health insurance policy. It can be an Individual or Group plan. Use your tax-free HSA dollars to “pay as you go” for medical expenses, until you spend up to your deductible. Once the deductible is met, the insurance policy pays for most or all of your medical expenses for the rest of the year. Very few High-Deductible plans have a co-insurance clause (80/20, etc.), so the Deductible is all you pay. |