Health savings account

Health Savings Account, more known as HSA, is a medical savings account. It is available for the Americans, who are enrolled in one of the HDHPs (High Deductible Health Plan). The contributed funds are accumulated from year to year. In comparison to the Health Reimbursement Arrangement, HSA can be owned only by an individual. Funds may be withdrawn to pay for medical expenses. Withdrawing funds earlier (or for non-medical purposes) may lead to certain penalties. Advocates of HSA believe that this program can help to decrease the cost of health insurance plans, which is growing rapidly, and make the health insurance much more efficient. This program encourages people to save for the future health care expenses and needs, and make the insurance holders more responsible for their health care choices.

Looking back into the history of HSA, it is worth mentioning that it was firstly a part of Medicare Prescription Drug, Improvement, and Modernization Act, which was adopted on the 8th of December, 2003 and signed by President Bush. These documents were created to improve the Medical Savings Account system.

A survey, performed last year showed that approximately 4,5 Americans had coverage by HSA-qualified health plans. 3,4 million of them had an employer-sponsored coverage, and about 1.1 million were covered by the individual HSA-qualified insurance plans. These numbers allow us to see an increase by 1.3 million enrolled in comparison to the year of 2006.

There are two main groups of people that clearly benefit from the HSA: those who stay healthy, and those who are predisposed to illnesses spending large amounts on medical treatment monthly. Considering the fact that all the spending is credited towards the deductible, the HSA will pay for the medications with the same co-pay as the other medical expenses, when the deductible is met. This could help you save.

The flexibility, HSA presents, is not available in some other health insurance plans. It allows paying on a pretax basis for qualified medical expenses that are not covered in the HSA, or other typical health insurance plan.

Another advantage of the HSA accounts is that the deposits are not tied to expenses in the exact plan or calendar year. They are moved to the future medical expenses, or may be used to cover the qualified expenses from the previous year, but only if they were qualified under the HSA plan.

Health Savings Account is a good way to save money and to make the insurance plan with high deductibles which makes it even more protective. To get free consultation on this topic, please register on our site.