How Will an HSA Save Me Money?

The Health Savings Account (HSA) is a tool to help you save money on health insurance. But how does it do that?

A Health Savings Account (HSA) is just a savings account. Duh, I know. It is just like a bank account where you can put money in and you can gain some interest.

But it has two special qualities that a regular bank account doesn't. First, when you put money in, that amount gets reduced from your taxable income. And you know what that means! You pay less taxes.

The second thing that's different about an HSA is that you can only withdraw money for specified medical reasons. Doctor visits, pharmaceutical or over-the-counter drugs, hospital visits, etc. may be paid with HSA money.

Now, all this helps you with money a little bit. You gain some interest in the account. And you pay a little less in taxes.

But the real benefit comes in an indirect way.

When you sign up for an HSA, your HSA custodian (insurance agent, bank, financial advisor, etc.) will ask you if you have a high-deductible health plan. That means whether you are currently covered by a health insurance policy that has a deductible of at least $1,000 for an individual and $2,000 for a family.

If you don't have that type of health insurance, you cannot get an HSA. Period.

But if you do, then the health insurance and the HSA fit together perfectly.

You pay for the small stuff each year with your HSA money. Then, when and if a big medical bill comes, your health insurance policy covers it.

But a funny thing happens when you switch from a low-deductible health plan to a high-deductible health plan.

Your premiums, that is the payments you have to make month-to-month, drop through the floor. They become astonishingly low.

For my wife and I, a low-deductible policy would cost about $1,100 a month. That's a huge amount!

But we've chosen a high-deductible policy, which costs $175 a month.

That's an incredible difference.

In fact, it is such a huge difference, that I want you to do a little calculation with me. What if I got sick every single year, so sick that I had to use my entire HSA every single year. I would basically exceed my deductible every year.

Would I still be glad that I had a high-deductible policy and an HSA?

Yes, I would. Really.

Add up the amounts and you'll see. $1,100 per month equals $13,200 per year. If the deductible is $250, I'd have to pay that too (if I was so sick) so the total would be $13,450.

With the high-deductible policy, $175 times twelve months equals $2,100 in premiums. Add a high-deductible of $5,000 and you've got a total of $7,100.

This means that, in my worst year I would still save $6,350.

What about in a healthy year? I would save $11,100. That's like two all-expenses-paid vacations a year!

Or, in my case, that's a ton of yoga classes, visits to a naturopath, polarity therapy, massages and reflexology sessions.

Do the math for your own family. You will be surprised. I teach this stuff in classes and there are often people who suddenly blurt out "I never realized that!" and I can just see them scurrying to their insurance agents after the class to make the changes and sign up for an HSA.

Health Savings Accounts are a wonderful tool to help you save money on insurance. They are available today! See your insurance agent, bank or financial advisor for details.

Daryl Kulak is the author of the book "Health Insurance Off the Grid - A Wonderful Way to Use Alternative Medicine and Save Money on Insurance Using the New Health Savings Account (HSA)." The book provides a nine-step plan to get your self-employed or small business health insurance costs under control using a unique approach you won't find anywhere else. The book is available for sale as an e-Book or paperback at the Website http://www.healthoffthegrid.com

---

Health Savings Account (HSA): Helpful for Older People?

The Health Savings Account (HSA) is an amazing tool that... Read More

Health Insurance Plans - Benefits to Different Plans & Providers

Health insurance plans vary in their coverage and prices. The... Read More

Will Online Automobile Insurance Quotes Really Save Me Money?

If you're looking to save money on your auto insurance... Read More

Term Life - Who Needs It?

If you've read any of the books or articles by... Read More

Homeowners Insurance at a Glance

At first glance, homeowners insurance may seem perplexing and quite... Read More

Insurance Adjusters How They Work And How They Think

Here comes the insurance adjuster. Is he overly friendly? If... Read More

We Dont Need Another Broker: How To Get The Best Liability Insurance Rates Available

Some business relationships are forged through blood and friendship. When... Read More

Flat Insurance in the UK

What are the factors involved in flat insurance? Do I... Read More

Sleep-At-Night Coverage With A Private Health Insurance ( Affordable Health Insurance )

Health Insurance: a sense of dissatisfactionThe three C's, customization, consumerization... Read More

Finding Health Insurance for Self-Employed Individuals: A Guide For the Freelance Newbie

With a rise in those looking to venture out on... Read More

Cheap Health Insurance - Health Insurance for The Self Employed

If you're self employed, you may think of health insurance... Read More

The Great Value Of Accident Photographs

You were humming along on a bright and sunny day... Read More

How to Reduce Car Insurance Premiums

Here are some useful tips on how to reduce car... Read More

Car Insurance Gearing up to Drive Down Costs

For once finances seem to be going in favour of... Read More

Discount Car Insurance Brokers - Get Amazing Comparisons

To get the cheapest possible quote for your car insurance,... Read More

Health Savings Accounts (HSA): Do I Still Submit My Bills to Insurance When Using HSA Money?

The Health Savings Account (HSA) is becoming well-known as an... Read More

Cheap Car Insurance

Finding good car insurance can be very difficult. Here are... Read More

Risk Retention Groups RRG

In response to a hard insurance market in the mid... Read More

General Knowledge - Critical Illness Insurance

Critical illness can happen to anyone, and often does. If... Read More

Long Term Care Insurance How Much Should I Buy?

Long-term care insurance policies have a variety of features and... Read More

Are You Overpaying On Your Home Insurance Policy?

For many consumers the cost of daily living is becoming... Read More

Why Does Health Insurance Cost So Much?

Why does health insurance cost so much? Year after year,... Read More

Home Insurance Rates in Northern Ireland

A recent survey took the most popular type of home... Read More

Life Settlements, More than a Cash Surrender Payout

With a life insurance settlement, seniors now have the ability... Read More

Why Dont Insurance Companies Reward Us for Being Healthy?

Insurance is always a gamble, a bet actually.You are betting... Read More

Ever Wondered What An Auto Insurance Claim Adjuster Does?

An auto insurance claim adjuster works for the insurance company... Read More

Is Your Financial Security at Risk?

The topic of insurance is not sexy by any means.... Read More

What You Need to Know About Auto Insurance

Let's be realistic, everyone needs to have auto insurance. Aside... Read More

Disaster Decision - Do You Need Insurance?

The expenses involved with owning a home can be overwhelming... Read More

Car and Home Insurance Northern Ireland

Don't skimp on insurance. This probably doesn't sound like a... Read More

5 Strategies To Reduce Your Car Insurance Premiums

Your latest car insurance bill has arrived and it is... Read More

How to Shop for Individual Health Insurance

If you find yourself in the position of shopping for... Read More

Independent Insurance Agents Unite! Insurance and Financial Discussion Forums are all the Rage

The online discussion forum has emerged as the medium of... Read More