THESE ARE TAX-FREE SAVINGS ACCOUNTS AIMED AT BUILDING UP COVERAGE FOR FUTURE MEDICAL EXPENSES. ONLY PATIENTS WITH A HIGH-DEDUCTIBLE PLAN AND CURRENTLY HAVE NO OTHER INSURANCE PLANS ARE ELIGIBLE.
This type of plan is useful for those who are seeking some kind of protection, do not envisage having any or many ongoing medical costs, and would like to be ready for an emergency or catastrophic healthcare cost. Small businesses may find HSAs a useful alternative to the more traditional health plans on the market.
People can enter an HSA plan through their employer if such a plan is available through the company, or individually (in some states). The HSA plan needs to be paired with an existing health plan with an annual deductible of over $1,100 for individuals and $2,200 for families. There is a limit on total out-of-pocket costs, including copayments and deductibles. Limits can vary as time goes by. Even though deductibles tend to be much higher than in other plans, some of them do offer full coverage, while others offer nearly full coverage (with a small copayment for preventive care).
In general, health plans with high-deductibles have cheaper premiums; however, out-of-pocket costs are much higher. To compensate for that, the insured can contribute a certain amount of money to a tax-advantaged account - the amount as well as the details of tax benefits vary from year to year. The contributions can be used to reduce the insured taxable income. If payments are made by an employer on behalf of an employee, they are tax free. The money in the HSA plan can be used at any time for approved medical expenses
