This article is aimed at explaining what high deductible health savings accounts are. Read to know all about this financial innovation in the health care sector.
A high deductible health savings account is a great option for all those who do not wish to have the age-old, or traditional health insurance, but still wish to pay for health care facilities availed, in a different way. The most important advantage of such an account is that you can save a lot of tax by opting for it. There are many people in the financial services and medical field who advise choosing such plans. Here’s detailed information on opting for such an account.
Health savings account is a unique way of saving for your medical expenses, if you are a United States taxpayer and have enrolled for a high deductible health insurance plan. To get the benefits of a health savings account, it is mandatory to open a high deductible health plan (HDHP) in your name. Now, if you go by the recent numbers, you will find that the minimum deductible for such a plan is just around $1000 for individual coverage, and just a little more than $2000 for total family coverage.
A high deductible health savings plan can be useful to lower your health insurance premium, by anywhere between forty to fifty percent, which is simply great, considering the amount of money you would be saving. Once a health savings account is opened, you do not have to pay any tax on the amount received, in the form of interest or any other form of earnings.
At times, it has been observed that the insurance premium paid in normal health insurance plans is almost double than that paid in the high deductible health plan. The other common name given to the high deductible health plans is consumer driven insurance. You need to study the insurance plans carefully to choose the best one for you and your family.
If you have enrolled for the Medicare program, then you will not be eligible for this account. These accounts could be ideal for people with high incomes looking to save a lot of money on taxes. The target customers for institutions who have introduced such insurance programs would be those utilizing health care services the least.
A Health Reimbursement Account (HRA) can also be formed with the help of a high deductible health insurance plan. Under the health reimbursement account scheme, the advantage or benefit to employers is that they will have to pay much lesser premiums and that the funds which will be reimbursed, will not have the burden of social security tax. The employer payroll taxes also, are not applicable for this kind of account. If you wish to avail the facility of checkups and preventive care facilities in some hospitals, then HDHPs can pay for the same, even before you have paid for the deductible.
You should take the offers of different health insurance companies into consideration and choose the best among them. You can also consult medical professionals to guide you in a better way, as they have spent many years in the industry and are more knowledgeable than you.