Nuts and Bolts of the HSAs

It’s pretty much a given that when it comes to health care the premiums will keep going up.

With health care premiums on their way up just about every year, it should come as no surprise that a lot of companies are starting to offer health savings accounts as a benefit for working. These accounts are beginning to replace PPOs and HMOs.

The most attractive thing about health savings accounts is the fact that they are tax free when linked to an insurance policy with a high deductible; usually about $1,250 for a single person and $2,500 for a family. When you hit the deductible you get comprehensive coverage. Many people are finding that they like this type of arrangement.

Since it’s a bit of a burden to handle some of the upfront out-of-pocket expenses, you have the option of handing over (pre-tax of course) anywhere up to $2,650 for a single person and up to $5,250 for a family.

All you need to do is tuck that away into a health savings account. Remember as well that when you take money out of a health savings account it is also tax free just so long as the money is used for medical expenses.

Not too many people seem to realize that any money that isn’t spent in the health savings account will roll over automatically year after year. That money can then either earn interest or you can invest it into participating mutual funds. This would kick up your returns and, with some luck and smart investing, you could find yourself sitting on a tax free bundle of cash for health care costs.

Here is another tip for employers. They are able to save between 25 to 30 percent on health premiums just by the simple expediency of switching to health savings accounts. That would mean lower premiums for workers. Really, both employers and workers get a good deal when they switch to health savings accounts.

However, some companies are finding it hard to sell the concept. For example, some health care plans have a very low deductible of about $150. It’s pretty hard to sell a worker on switching to a plan with a much higher deductible. Furthermore, those who have been used to having a co-pay when they visit a doctor are rather put out by having to pay the whole amount up-front.

Another barrier to companies offering health savings accounts is the perception that they aren’t for the average Joe Blow worker and are instead for those who are in good health and have lots of money. Over time these objections have proven to be invalid and many workers are now reaping the advantages of health savings accounts. Many industry pundits think these accounts will be the wave of the future, as they are certainly attractive options.

Clelland Green is with, a leader in providing health insurance quotes. Benepath provides individuals, families, and businesses with affordable health insurance quotes in just a few mouse clicks. To learn more about Health insurance quotes, affordable health insurance, affordable health insurance quotes, health insurance plans, visit

Tagged with: , , ,