Little Explanation About Health Insurance

Life Insurance - Little Explanation About Health InsuranceConsumers shopping for affordable individual health insurance were the first to gravitate toward HSA-eligible plans, followed by small employers, says Dennis Triplett, CEO of UMB Healthcare Services in Kansas City, Mo., which services health spending accounts, including HSAs."Now we're seeing interest from larger businesses," says Triplett, who also chairs the HSA Council at America's Health Insurance Plans (AHIP).

Little Explanation About Health Insurance

The number of Americans covered by "health savings account/high-deductible health plans" totaled  10 million in January 2010, up from 8 million the previous year and 6.1 million in January 2008, according to a May 2010 report by AHIP. Large-group coverage was the fastest-growing market for the products from January 2009 to January 2010, rising by 33 percent, AHIP says.

Triplett says that in the last year, his company saw a 40 percent increase in the number of HSA accounts it services.
How these health insurance plans work

Not all high-deductible health plans can be paired with an HSA. To qualify for HDHP status in 2011, the plan must have a deductible of at least $1,200 for an individual and $2,400 for a family. Out-of-pocket maximums can be no more than $5,950 for an individual and $11,900 for a family.

You can contribute up to $3,050 per year in pre-tax dollars to an HSA as an individual or up to $6,150 as a family. You can save an additional $1,000 in the account if you're 55 or older.

The money in the account grows tax-free, and in some cases companies that service the accounts provide investment options such as mutual funds to promote further savings growth, Laden says.

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When you withdraw the funds, you do not have to pay taxes so long as the withdrawals you take are for qualified medical insurance  expenses, such as the HDHP’s deductible or medical costs not covered under the plan, including dental and vision care. You can also use the accounts to save for long-term care not covered by Medicare.

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