Health Saving Account


Image 3Health care is an important part of an individuals medical benefits.   With health care cost rising, individuals are looking for alternatives to the customary managed care plans.   One of the options available is a Health Savings Account (HSA).    


An HSA is a type of consumer driven health care plan.   HSAs are a relatively new type of health care coverage modeled after Medical Savings Accounts (MSAs).    It is a type of account that allows individuals to save for qualified medical expenses tax- free.    HSAs are open to anyone who is enrolled in a qualified high deductible Health Plan.   Account funds are contributed by an individual into the account tax-free.   


The Affordable Care Act allows up to $3,400 for individuals and $6,750 for families to be contributed on a tax-free annual bases in 2017.   Money in the HSA is allowed to accumulate in the account and earn interest.   When the account holder has a qualified medical expense, that person would withdraw the money tax-free for those expenses.   Some types of qualified medical expenses the account is used to pay for includes deductibles, co-insurance costs and co-pays.   The money stays in the account from year to year and just keeps rolling over.      HSA are owned by the individual not an employer.   Any money contributed into the account is the individuals to use for their qualified medical expenses.


The minimum level of coverage required to meet the individual mandate was specifically designed to allow for the purchase of qualified high deductible plan that would complement the HSA     The Affordable Care Act created four benefit categories of plan plus and a seperate catastrophic plan to be offered through the Government sponsored Marketplace Exchange in the Individual and/or Family market.    The Bronze plan represents minimum creditable coverage and provides the essential health benefits, cover 60% of the benefit costs of the plan, with an out -of-pocket limit equal to the Health Savings Account (HSA) current law limit ($5,950 for individuals and $11,900 for families in 2017).        The Silver (70%), Gold (80%) and Platinum (90%) plans utilize the same out-of-pocket expenses rules as the Bronze plan but the higher coverage (70%, 80%, 90%, respectively).