Megapolis Insurance

Health savings accounts can help to curb premiums while offering a tax break, so how can consumers find a provider for their health savings account (HSA)? Banks and other financial institutions, along with health insurance providers, can show HSA owners a variety of options, but the HSA owners needs to determine priorities.

When looking for institutions that offer health savings accounts, compare monthly maintenance fees, set-up fees and transaction fees. It’s just as important to compare the interest rate earned on account balances and your options to access funds.

Will you have online access to your account and statements? What about online bill pay? Another service that can be very helpful is having a debit card. Balance the services you want from your health savings account provider against fees on the account to narrow down your choices.

Once you have your HSA set up, remember to be careful to only use it for qualified health care expenses. An HSA allows you to make many expenses such as acupuncture, co-pays, chiropractor services, dental services, homeopathy, prescriptions and many other health care expenses tax deductible.

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SB 1262, by Senator Sam Aanestad (R-Grass Valley), could have cut California’s spending for health care retirement with tax-free Health Savings Accounts (HSA). It would have required the California Public Employees’ Retirement System to offer lower cost HSA Plans to state employees.

SB 1262 died as state labor unions opposed the bill in committee hearings, including the Service Employees International Union, California Labor Federation and the California School Employees Association.

Senator Aanestad cannot understand opposition to this HSA plan that is already offered in 46 other states. He says that his plan is based upon the HSA policy that is offered in Indiana, which added an HSA Plan option for state employees in 2005.

By 2010, more than 70 percent of Indiana’s 30,000 state workers had selected the HSA option.

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United Health Group Inc., now one of the Twin Cities’ largest banks, has seen its OptumHealth Bank top the $1-billion mark for deposits on its books, and it’s all due to Health Savings Accounts. By the end of June, its Health Savings Account deposits were at $1.025 billion. Chartered in Salt Lake City and part of Minnetonka-based UnitedHealth, UnitedHealth has helped thousands of employers to set up Health Savings Accounts for their employees.

There is a growing trend for employers to offer employees these tax-advantaged Health Savings Accounts in combination with high-deductible health care plans. The HSA plans typically keep premiums low, and employees can make tax-deductible withdrawals to pay for qualified medical expenses.

When Congress passed the Medicare Modernization Act in 2003 that allowed tax-exempt deposits and withdrawals for medical expenses for the first time. UnitedHealth opened its first Health Savings Account the very next year in order to simplify health care for its customers. The surprise is that UnitedHealth, with more than $1 billion in deposits, doesn’t even handle retail banking.

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Health Savings Accounts may have been stifled by complex regulations, but these accounts can do much more than just turn your healthcare bills into tax deductions. With unemployment a constant threat, health savings accounts help people maintain coverage between jobs, and even into retirement.

Anyone under 65 can start a Health Savings Account once they buy a qualified high-deductible health insurance plan. That’s an insurance plan with a deductible of at least $1,050 for individuals or $2,100 for families. These plans mush also have a limit of $5,250 for an individual and $10,500 for a family on their out-of-pocket costs.

HSA Plans have a great advantage over flexibility spending accounts for medical expenses because, unlike flexible spending accounts, HSA contributions and gains roll over from year to year. Any funds not used annually in a flexible savings account are lost at yearend or when employment ends. All withdrawals from a Health Savings Account must be for qualified healthcare expenses otherwise you face a penalty of 10 percent.

Health Savings Accounts are completely independent of employment so these funds can be used as a “safety net” when jobs are lost, or workers move to new jobs. Aft

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