Compelling Reasons to Own a - HDHP - High Deductible Health Plan
(HSA)
#1 Deduct up to $7,600 on Your 2008 Tax Return - Possibly
Even More Than the Deduction Amount. You can deduct your HSA
contribution and save money even if you do not itemize your taxes. With
deduction amounts of up to $7,600 (family maximum contribution of $5,800 plus
two $900 catch up contributions) the tax savings can be substantial. For 2008,
you can deduct up to the government maximums ($5,800 family and $2,900 single)
even if your deductible amount on your insurance is less. This creates a great
opportunity for some to buy the lowest HDHP plan and then fully fund the HSA.
#2 Take A Full Deduction Even if you Start Your HSA Mid-Year. You
can take a full deduction ($5,800 family, $2,900 single plus catch-up) even if
you start mid-year. In order to get the full deduction amount, you must start
your High Deductible Health Insurance HSA no later than December 1, 2008.
Caution: A penalty applies if you fail to maintain high deductible coverage for
a testing period.
#3 Transfer Money from Your IRA into Your HSA. You
can roll money from your Individual retirement account into an HSA to fund the
HSA. You are limited to the amount you are eligible to contribute to your HSA
for the year and you cannot make a double contribution. This is a once in a
lifetime option. You must do this as a trustee-to-trustee transfer to be
eligible.
#4 Pay for Eligible Medical Expenses Tax Free. If
you have an HDHP you must open your HSA before you incur any
medical expenses. Use your HSA to pay for eligible medical expenses tax free.
#5 No Use it or Lose it Provisions. There's no need
to spend the end of the year stocking up on glasses, contacts and other things
you don't need just so you can spend everything left in your health care
account. With an HSA the fund belong to you. There are no use it or lose it
provisions. Any unused funds stay in your HSA for your benefit in the future.
Even better, earnings on the HSA are not taxable.
#6 Take Control Over Your Medical Spending. HDHPs
and HSAs give you more control over your health care expenses and let you use
your money in your best interests. Take charge in 2008. HSAs do not control how
you spend or save your money.
#7 Start Accumulating Savings for Retirement. Use
your HSA funds for retirement at age 65 and get basically the same tax treatment
as IRAs and 401(k)s. A better choice may be to use the money to pay for health
insurance premiums after you are age 65, long-term care insurance or Medicare
premiums after age 65 - all approved tax free reasons for your HSA.
#8 Simplify Your Life - Stop Submitting Receipts - Use a
Debit Card or Checks to Pay Expenses. We make it easy and convenient for
you to access your money with free starter checks, a free debit card and free
electronic transfers. Access your money in a manner convenient to you - our HSA
is not designed to regulate you or check on how you are using your funds.
#9 Keep Your Medical Expenses Private in 2008. HSAs
do not share your medical receipts with your employer. Your medical expenses are
private. However, you do need to save your receipts for tax purposes and we can
provide the form to help you.
#10 Start Earning Interest for Medical Savings in 2008.
Tired of deferring money each year into a medical reimbursement account that
pays no interest? And then takes your extra money at the end of the year? Most
HSA accounts pay interest on all checking account balances, and with some, that
interest rate increases as your balance increases.
