September 16, 2015
High Deductible Health Insurance and Health Savings Accounts
Do you currently have high deductible health insurance? Because of Obamacare, many businesses are only offering high deductible policies to their employees. More young healthy individuals who didn’t have health insurance in the past are getting high deductible policies. The trend now is even for the wealthy to get high deductible policies. Why? Individuals with high deductible policies have the option to invest in a HSA plan. A health savings plan is an account that can be setup at a local bank and funds saved for medical expenses. It is like a separate checking or savings account that should be used exclusively for health costs. Health costs can include medical bills, prescriptions, dental visits, eye doctor visits, and much more. Medical expenses that go through HSA plans are 100% deductible up to the maximum limit which varies year to year. For 2015, the limit is $3350 for individuals and $6650 for families. For those in the 25% tax bracket, tax savings would be $1662.
Many clients that come to me think they have been writing off their medical expenses for years. They turn their expenses into their accountant each year and assume the deduction has been made. Unfortunately, without a HSA plan, only costs exceeding 10% of AGI can be deducted. Most people don’t qualify for the deduction. That’s why HSA plans are so beneficial when used with high deductible policies.
For more information on Health Savings Plans (HSA), contact Stacy Dixon, CPA 865-217-6803
Here is a great article with more details on HSA Plans.