Health Savings Accounts Even More Attractive Thanks to Congress
By giving final approval to the "Tax Relief and Health Care Act of 2006", congress has made Health Savings Accounts (HSAs) even more attractive by adding several new incentives. Additional tax breaks and provisions that will make it easier to open an HSA are expected to produce a dramatic increase in the number of people who set up health savings accounts, particularly among consumers purchasing individual and family health insurance plans.
Fort Collins, CO (PRWEB) December 13, 2006
Health Savings Accounts (HSAs) received a boost this weekend when the U. S. Congress gave final approval to H. R. 6111, the "Tax Relief and Health Care Act of 2006". The additional incentives should greatly improve the popularity of HSAs, particularly among individuals and families purchasing their own health insurance, according to leading health insurance broker HSA for America.
"HSA plans are already the best health insurance value for just about anyone who is paying for his or her own health insurance," said HSA for America President Wiley Long. "They lower premiums, provide immediate tax reductions, and make it easier to save for medical expenses during retirement. These changes will result in HSA plans eclipsing co-pay plans as the primary choice among small business owners, independent contractors, and anyone who's self-employed or does not have employer-provided coverage."
Health savings accounts are special tax-favored savings accounts that anyone with a qualified high-deductible health insurance plan can open and fund. Any money put in the account is tax deductible, and can be used tax-free to pay for future medical expenses. If the money is not withdrawn, it continues to grow tax-deferred like an IRA. HSAs first became available in January 2004, and today nearly five million people are covered by an HSA-qualified health insurance plan.
Long said the legislation contains several improvements to the already popular HSA program that will make HSA plans the most popular type of coverage in the near future.
It allows people to fund their HSAs with a one-time transfers from their Individual Retirement Accounts (IRAs). Because funds withdrawn from an HSA to pay medical expenses are never taxed, an HSA is a much more tax-advantaged investment than an IRA. This provision will enable someone to quickly maximize their contribution, so that they can fully cover the deductible on their high-deductible health insurance plan.
The bill allows individuals with HSA-qualified policies to contribute up to the annual contribution limit ($2,850 for individual coverage and $5,650 for family coverage in 2007), even if their deductible is less than this amount. Until now, policyholders with smaller deductibles were penalized because they were not allowed the same tax benefits as those with larger deductibles.
Allows individuals to make the maximum contribution to the HSA, regardless of when the HSA plan began. Taxpayers who purchase an HSA plan later in the year will still be allowed to make the full HSA contribution, instead of a pro-rated portion as is currently the case. This will enable them to completely cover their deductible with funds from the HSA if they have some large medical bills, and also gives them the same tax benefits as someone who purchased the plan earlier in the year.
"I expect very few people will continue to purchase health insurance plans with co-pays once they understand how easy and inexpensive these plans now are", said Long. "HSA plans can already reduce a family's annual expenses by several thousand dollars.
Long says HSA for America, which markets HSA-qualified plans to individuals and families, is currently expanding in anticipation of a growing surge of interest in health savings accounts in 2007. "We've already had a lot of people calling us about these changes, and have started hosting weekly teleseminars to share this information and answer questions from curious consumers."
The HSA for America teleseminar is offered to registered participants at no charge. For more information about the Health Savings Account Teleseminar and how to sign up, visit: http://www. health--savings--accounts. com/teleseminar. htm (http://www. health--savings--accounts. com/teleseminar. htm)
About HSA for America
HSA for America is the nation's leading independent health insurance firm specializing in individual and family coverage that works with a Health Savings Account. Through our comprehensive website we offer complete information on HSAs and qualifying health insurance plans. We offer instant quotes, online health insurance applications, and access to several banks that can act as an HSA administrator for your account. Visit http://www. health--savings--accounts. com (http://www. health--savings--accounts. com) for complete information.
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