Florida - Health Savings Accounts

Florida Health Savings Accounts Florida health insurance agents

Florida HSA Accounts are without a doubt the best value in health insurance today. The government is paying you, via tax deductions, to help you pay for your health insurance. It's like getting a significantly lower deductible then you would ordinarily get for the same premium! Funds from you Savings Account accrue interest at a market rate and can be used for doctors, dentists, prescriptions, psychotherapy, chiropractor, etc. If you don't use the money in your savings account it rolls over into the next calendar year, unlike employer based HSA accounts.

The HSA plan has essentially two parts.

First there is a high-deductible major medical plan. This is a complete health insurance plan that will provide millions of dollars of coverage for you and your family. Once you reach your deductible, all eligible expenses are covered 100%. The second part is the Health Savings Account. This is an interest-bearing account and the money rolls over from year to year. You can use the savings account funds for almost any type of medical expense without worrying about networks. Money contributed to a Florida HSA is exempt from both Federal and State taxes, like an IRA, and accumulates interest on a tax deferred basis, like an IRA. Some insurance companies will set up and administer the HSA for you while others allow you to get one set up on your own through a local bank or financial institution.

Here's an example of how one works (using a family of four with the parent ages of 45 and 40 and two kids):

Deductible: $ 5,650
Monthly Cost of Insurance $325.00

They put into a Health Savings Account $ 429.16
Total Monthly Cost $ 754.16

Now here's the good part! We will use a 28% tax bracket for this illustration.

Tax Deduction for Insurance (Insurance Premium x 100% x 28%) $ 91.00
Tax Deduction for Savings Deposit (Savings Deposit x 28%) $120.16
Total Tax Savings $ 211.16
Cost After Tax Savings $ 543.00

But don't forget the $429.16 is your money and its accruing 5% compound interest just like an IRA would. Score one for for the Individual Health Insurance consumer!

Where do the contributions go?

Contributions are 100% tax deductible in 2006. What you do not use one year rolls over to the next year and continues to grow interest just like a traditional IRA, but its a Medical or Health related IRA... These tax deductions are in addition to any IRA's you currently have and will not effect those plans in any way. Except of course, to lower your tax bill.

What if I have a medical bill?

Large or small, all medical expenses are covered by your low cost Florida health insurance policy.

How do I save money on my medical bills?

A traditional Florida health insurance plan with co-pays, is typically 30 to 70% higher in cost, more restrictive to use than an Health Savings Account and still leave you with out of pocket expenses most people don't expect to pay. An Health Savings Account plan effectively reduces your deductible by your applicable tax bracket. So if you're in a 28% tax bracket, its like receiving a 28% discount on your medical insurance deductible (e.g. An Health Savings Account with a $5,250 family deductible is effectively reduced to $3,780 when you use your tax free money to pay your deductible. Its not great but that's not bad!

How does the Health Savings Account Work?

Take the premiums you currently spend on a high cost traditional individual or group plan and split it into 2 parts. One part will go to pay for the lower cost higher deductible health insurance plan and the other part. "The amount saved" would go into the medical IRA. There is complete flexibility on where the saved part of the premium goes. Typically you are guaranteed a minimum of an interest bearing account earning 4%.

The savings placed in the Health Savings Account can be used for the small medical expenses until the deductible is met. You will receive a check book and interest will be compounded on your balance in the account. Typically the savings are F.D.I.C. insured. Should the need arise for a larger medical expense then the higher deductible health plan would kick in and limit the out of pocket expenses to the deductible each year.

What applies to my health insurance deductible?

All covered medical expenses apply to the deductible each year including Doctors office visits, Prescriptions, and any major medical claims. Health Savings Account family plans have one deductible for the entire family. So, all covered medical expenses for the entire family apply to one deductible.

How many deductibles are there?

Typically there is only one family deductible. No more deductibles for each family member. There is only one deductible for the entire family when 2 or more people are covered on the same plan. We typically suggest a 100% co-insurance level ( meaning you pay nothing more once your deductible has been met....including Rx and doctor visits! ) to limit the entire out of pocket expenses to the chosen deductible.

What else can the Health Savings Account be used for?

Tax free dollars can also be used to virtually pay for all other medical expenses typically not covered under traditional types of health plans like dental, eyeglasses, contact lenses, Lasic eye surgery and much more. Call today at (407) 425-9347 with questions, or click here to get a quote now.

Hegeman Insurance Brokerage
An Orlando Registered Life & Health Agency Specializing In Florida Health Insurance
400 E. Colonial Dr. Suite #1302, Orlando, FL 32803-4517
Phone: (407) 425-9347/800-444-5797 | Fax (407) 423-7483
Florida Health Insurance License # A115384