Health Insurance Plans
California HSA Health Insurance
A Health Savings Account (HSA) is an alternative to traditional health insurance because it is a savings product that offers a different way for consumers to pay for their health care. An HSA works something like an IRA, except the money is used to pay eligible medical expenses with pre-tax dollars (tax-free) and save for retirement on a tax-deferred basis.
You must be covered by a High Deductible Health Plan (HDHP) to be able to take advantage of Health Savings Accounts. An HDHP generally costs less than what traditional health care coverage costs, so the money that you save on insurance can therefore be put into the Health Savings Account. You own and you control the money in your HSA. Decisions on how to spend the money are made by you without relying on a third party or a health insurer. Depending on which bank you choose to enroll your HSA through, there will be different options for investing your money into mutual funds for greater return on your savings.
Frequently Asked Questions
Maximum annual contribution (if you have single coverage) for 2008 is $2,900 or $5,800 (if you have family coverage), plus an additional amount if you are or will be age 55 or older before the end of the year. There are no minimum opening fees. The amounts listed are in effect for 2008 and are subject to annual cost-of-living adjustments.
You can use your HSA to pay for qualified medical expenses such as:
- Medical and pharmacy expenses.
- Your annual deductible payments for physician, pharmacy, dental, vision, etc.
- Your co-payment at the doctor’s office.
- Your prescriptions at the pharmacy.
- Other services, including your supplemental service visits (dental or vision).
A comprehensive list of qualified medical expenses as defined by the IRS can be found at: www.irs.gov/publications/p502/ar02.html#d0e201. (Please note that some of the expenses listed in publication 502 cannot be reimbursed from an HSA. You should check with a qualified tax or legal advisor for more information.)
The health plan must have an annual deductible of 1,100 dollars for an individual and at least 2,200 for families. The sum of the annual deductible and the other annual out-of-pocket expenses required to be paid under the plan (other than premiums) does not exceed $5,500 for individuals and $11,000 for families.
You can make a one-time distribution from an IRA to fund your HSA, provided it doesn't exceed HSA contribution limits. Employees have the opportunity for a one-time, tax-free transfer of funds from their flexible spending account (FSA) or health reimbursement arrangement (HRA) to their HSA.
HSA accounts are available to anyone under the age of 65 in the United States who has a high deductible plan in place.
It’s as easy as 1, 2, 3. Select the high deductible plan of your choice, apply for it through JC Lewis and then choose an administrator for your account. At JC Lewis we recommend Wells Fargo due to the limited amount of fees.
You may save money in the short and long term by:
- Deducting 100% of your HSA contributions from your taxable income
- Having the money in your HSA accrue interest and/or gains on a tax-free basis
- Paying no penalties or taxes when you use your HSA to pay for qualified medical expenses.
- Having a high-deductible which typically has a lower premium than a plan with a lower deductible
