BULLETIN: Effective
Jan 1st, 2004, the new HSA (Health Savings
Account) expanded the MSA accounts to allow
among others, the following improvements:
100%
funding of the deductible up to set limits
Permanent program...no longer needs to renewed
No longer requires self-employed status
Both employer and employee funding of accounts for
Small Group policies
Now...on to the Health Savings Account
Think
of the HSA (health savings account) as a
combination between a high deductible insurance
plan and an IRA (individual retirement account)
- fund with pre-tax dollars
- accrue interest tax-deferred
- pay out medical bills
tax-free
Health Savings Accounts
were created to go hand-in-hand with a qualified
high-deductible health care plan so that
individuals could pay less in monthly dues and put
the savings (along with additional funds) in a
tax-exempt HSA. An HSA allows you to use tax-free
dollars to cover routine and minor medical
expenses while you satisfy your
deductible-expenses that would otherwise come out
of your after-tax income.
Let's take a better look at how it all
works...essentially there are two parts...next
page
