Louisiana residents can avail of health plans compatible with a health savings account from insurance providers.
There’s no getting around the fact that most consumers these days want and need to save as much money as they can, often forgoing such necessities as health care coverage. However, due to the Affordable Care Act, health insurance can be attainable. In fact, those who choose not to get health insurance coverage will pay more for penalties than they would for premiums. One option open to Louisiana residents is to obtain health plans compatible with an HSA (Health Savings Account) from insurance providers.
What is an HSA?
The HSACenter.com explains that a Health Savings Account or HSA “combines high deductible health insurance with a tax-favored savings account. Money in the savings account can help pay the deductible. Once the deductible is met, the insurance starts paying. Money left in the savings account earns interest and is yours to keep.”
Health savings accounts are not exclusive to high deductible health plans (HDHP) offered by employers. These are also available to consumers through insurance companies and through the state and federally operated marketplaces that were created by the Affordable Care Act.
What are the Benefits of Health Savings Accounts
There are a variety of benefits derived from having a health savings account:
High Deductible Health Plan
You will pay lower premiums than with other traditional health plan options with a high deductible health plan.
You will get high quality insurance.
This kind of health plan can pay 100% of covered expenses once the deductible is met.
This can be used to pay your deductible.
You will not be taxed or penalized at all when used for qualified medical expenses, including dental and vision.
Contributions to this kind of savings account is tax deductible off of your gross income (up to the legal limit).
The interest earnings accumulate tax-deferred, and as mentioned, when used to pay for qualified medical expenses, are tax-free.
Unlike a flexible spending account (FSA), the money left in your HSA will not be forfeited at the end of the year, but continues to grow tax-deferred and rolls over year after year.
You can use your HSA to pay for health insurance premiums if you suddenly find yourself in between jobs.
You can pay for qualified long-term care premiums with your HSA.
You can pay for Medicare premiums and out-of-pocket expenses with your HSA.
This account is portable and you can use it wherever you go.
After age 65, you can use the funds from your HSA to pay for non-health care expenses without penalty, but it will be taxed as income.
Who is Eligible to Open an HSA?
Consumers can open an HSA if they have a qualifying HDHP, and if:
They are not covered by any other non-HDHP health plan (e.g. their spouse’s plan that provides benefits covered by their HDHP plan). There are exemptions to this, such as permissible coverage that include specific injury insurance or accident, disability, dental, vision or long-term care insurance.