Health Savings Account Plan

July 14, 2009 - PRLog -- An HSA plan (Health Savings Account plan) is a new way to have a major medical health insurance plan and a separate savings account used to pay for healthcare expenses or supplement your retirement savings. It lets you:
•   Reduce your taxable income
•   Maintain a bigger spending control
•   Lower your retirement insurance premiums
•   Contribute to your retirement savings

An HSA account holder can make a 1 time distribution from an IRA to a HSA. An IRA, or Individual Retirement Account, is an account for retirement that provides some tax advantages for retirement savings in the United States. If you do choose to make the 1 time distribution to a HSA then funds will be immediately available to meet health needs with no tax implications.

If you are newly self employed, you can also transfer funds from an FSA or HRA. FSA (Flexible Spending Account) is another tax advantage account. It can be set up through a cafeteria plan of an employer in the United States. A FSA lets an employee set aside a portion of his or her earnings to pay for qualified expenses, usually for medical expenses but can also be for dependent care or other expenses. A HRA, or Health Reimbursement Arrangement, are linked with high-deductible health plans that include preventive care. They are employer funded accounts that employees can draw from to pay certain medical expenses.

An HSA can have many tax advantages:
•   Funds in your HSA roll over from year to year and earn interest tax-free.
•   You can take money from your account to pay for qualified medical expenses tax-free.
•   It is similar to an IRA.
•   The contributions made to your HSA are tax-deductible.
•   At the age of 65, you can take the money out of your HSA to pay for non-medical living expenses with no taxes or penalties.

Karen Thomas
Email: Karen.thomas@ushcareer.com
Web: www.ushginsurance.com/karen