Imagine if your current insurance policy could be eliminated. What if your current health insurance doesn’t cover office visits co-pays, or specialist co-pays? Did you ever consider how much a “zero” drug deductible could be costing you each month? If this is something you think about every day, or if you’re just one of those people who talk to us and tell us that they don’t visit the doctor as often as they used to, then why not switch to the ever-popular Health Savings Account.
The Health Savings account can save you money each month depending on your financial situation. It can also help to save your pocketbook. Many companies are promoting the plan, but what is the Health Savings Account? You have already won half of the battle if you are familiar with Flexible spending accounts and IRA’s. You must also have a HDHP (High Deductible Health Plan) to be eligible.
The HDHP is a cap on your out-of-pocket expenses. An individual could have a HDHP deductible of $2600. This would mean that $2600 annually would be out of pocket. This is what the company will pay for. The 100% plan is the best option. This means that the insurance company will pay 100% of your expenses after your deductible has been met. This is required to be eligible for the Health Savings Account. While $2600 may seem like a lot, this is where the Health Savings part comes in.
You chose to choose the $2600 deductible as an individual. This is paid in the same way as regular monthly insurance premiums. Here is an example for premiums paid by a Florida male 30 year old non-smoker living in Florida.
Typical Insurance 80/20
$1000 deductible, $25 OV copay
$0 Drug Deductible
Maximize Your Pocket $3000
Total: $134.15
HDHP
$2600 deductible
No bells and whistles
Max out of Pocket $2600
Total: $82.76
Savings of $51.39 per month
You are now eligible for the Health Savings Account because you have opened the HDHP. This account allows you to save money every month, up to the annual deductible of $2600. The account can then be used to pay for all the extras you don’t get with your standard insurance. You can use your Health Savings debit card to pay for doctor visits. With tax-deductible contributions and tax-free withdrawals, you can save money on qualified medical expenses.
This is where you will find the greatest savings. You can save money by not going to the doctor and saving the money rolls over to the next year. You can continue to earn interest each year and roll over your savings year after year. This is your chance to create a little nest egg you didn’t know you could have. Now you can take control of your own health care.
The Health Savings Account can be used to pay for eligible expenses that are not covered by your annual deductible. You can also use the Health Savings Account to pay for qualified medical expenses not covered by your health plan, such as vision care (glasses and contacts), dental or braces, or long-term care. Here are some examples of qualified medical expenses:
Dental
Hearing aids
Diabetic Supplies
Physical Therapy
Vision
Laser Eye Surgery
Over-the-Counter Meds
Speech Therapy
You can find out more about it here.
For a complete list, you will need to consult your insurer as lists can vary between insurance companies.
HSA is the only program that gives you control over your health care. You don’t have to pay for office visits or access to drug options. As the cost of healthcare insurance continues to rise, more companies are looking for this solution. With one plan, this is a way for companies to offer health insurance as well as a nest egg for their employees. This is the future in health care. Although you might not think twice about visiting the doctor for a common cold, you can save $100 by going to your local pharmacy instead.