What if you could strip down your current health insurance? What if you really don’t need office visit co-pays or co-pays to visit a specialist? Have you ever thought about what a “zero" drug deductible is costing you every month? If you are one of the many people that think about this everyday or maybe just that person who we talk to that tells us they don’t go to the doctor very often except for a physical, then why have you not opted to switch to the ever growing popular Health Savings Account?
Depending on your situation the Health Savings Account can really save you money every month and if done properly save your wallet. There are many companies marketing the plan these days but what really is the Health Savings Account? If you are familiar with Flexible Spending Accounts and IRA’s then you have won half the battle. The other half of the battle is the HDHP or High Deductible Health Plan that must be coupled with the HSA in order to qualify.
Think of the HDHP as a catastrophic cap on your out of pocket expenses. For an individual you could be looking at a $2600 deductible HDHP which means that your annual out of pocket would be $2600. The latter part of the HDHP will be what the company picks up after that. We always choose the 100% plan which means that after the deductible is met, the insurance company pays 100% of expenses. You have to have this in place in order to qualify for a Health Savings Account. Now $2600 seems like a lot of money but this is where the Health Savings portion comes into play.
As an individual you decided to pick the $2600 deductible, which is paid just like a regular insurance premium every month. Below is an example of premiums paid for a 30 yr old male non smoker living in
Typical Insurance 80/20
$1000 deductible $25 OV Copay
$0 Drug Deductible
Max Out of Pocket $3000
Total: $134.15
HDHP
$2600 deductible
no bells and whistles
Max Out of Pocket $2600
Total: $82.76
The savings is $51.39 a month
Since you opened up the HDHP, you now qualify for the Health Savings Account. The account is nothing more than a place to put the money you saved every month up to the deductible amount annually which for our example is $2600. This account is then used to pay for the bells and whistles that you stripped out of the typical insurance. When you go to the doctor you pull out your Health Savings debit card and pay for the doctor. You save money for qualified health expenses with tax deductible contributions and tax-free withdrawals.
Here is where the real savings happen. If you don’t go to the doctor or anything that year, the money that you saved rolls over into the next year where you can start saving again. This happens year after year, earning you interest and rolling over, again and again. You have the chance to build a little nest egg that you never thought you would never have. You have now taken control of your health care.
You can use the Health Savings Account for covered expenses that apply toward your annual deductible. You can also pay for qualified medical expenses that are not covered by the health plan such as vision care (glasses, contacts) or dental or braces or long term care. Some examples of qualified medical expenses are:
Dental
Hearing Aids
Diabetic Supplies
Physical Therapy
Vision
Laser Eye Surgery
Over the Counter Meds
Speech Therapy
And much, much more!
You will need to check with your insurer for a complete list as the lists vary among different insurance carriers.
The HSA is the only program around that puts you in control of your health care. Granted you do not have the office visit co-pays or the drug options. More and more companies are vying for this solution as the cost of health insurance continues to rise. This is a way for the companies to provide health insurance and a little nest egg for their employees with the convenience of one plan. I am telling you that this is the future of health care. You might think twice about going to the doctor for the typical cold but if you don’t at least you saved $100 by not going to the doctor and going to your pharmacy to get over the counter medication which you can use the HSA for. This is a chance for you and me to save real money so why have you not opened one up yet?Gulf Breeze Insurance, Inc.
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