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

---

Reducing Soaring Insurance Claim Costs

With the soaring rise in claims to insurers from their... Read More

The Many Benefits of Travel Protection Plans

Many people purchase insurance thinking I want full coverage and... Read More

Health Insurance Coverage

Health insurance is something that everyone needs today. The rising... Read More

Discover the Fortune Hiding in Your Insurance Premiums!

Ever thought about how to save money? Sure you have,... Read More

Term Life Insurance on Your Business Partner

Life insurance is something we often take out to protect... Read More

Disaster Decision - Do You Need Insurance?

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

Apply Online for Temporary Health Insurance

There are times when you'll find yourself temporarily without health... Read More

The Great Value Of Accident Photographs

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

Is Your Auto Insurance Company Rated?

Several national rating institutions rate insurance companies. Do coverages, rates,... Read More

What is Pet Health Insurance?

Pet Health Insurance can give you the peace of mind... Read More

Car Insurance Quotes Online ? Why You Should Use the Internet to Find a New Insurance Company

Before the internet, you picked a neighborhood car insurance agent,... Read More

Insure Your House

When we talk about insurance the thing you have to... Read More

Health Insurance Options for Entrepreneurs

One of the most important benefits employed people enjoy is... Read More

Does an HSA Cover Alternative Medicine?

A Health Savings Account (HSA) does not really cover alternative... Read More

What is Travel Insurance?

Travel Insurance is designed to protect your health, belongings, and... Read More

Auto Owners Insurance ? Do You Really Need It?

If you think you don't have any need for auto... Read More

Insurance and The Engineer

The world is no longer right when the two words,... Read More

Finding California High Risk Truck Insurance

California high risk truck insuranceIf your are in need of... Read More

Insurance Claim - Medical Insights And Expenses

There's nothing that has a greater impact on evaluating a... Read More

Facts About Renters Insurance

If you rent an apartment or house, you might consider... Read More

What Is Permanent Life Insurance?

Unlike term life insurance, permanent insurance policies such as universal... Read More

Health Savings Account (HSA): Do I Lose It At the End of Each Year?

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

Gain An Advantage Over Your Competition By Controlling The Cost Of Your Health Insurance

As many of us expect, the New Year will bring... Read More

How to Reduce Car Insurance Premiums

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

Cure The Insurance Blues By Lowering The Cost of Your Premiums

Does the current amount that you pay on your insurance... Read More

Health and Dental Insurance Quotes - Applying Online

Since 2001, large health and dental insurance companies such as... Read More

Taking The Mystery Out Of Long-Term Care Insurance

Here's the good news: with improvements in medical technology and... Read More

A Guide to Insuring Your Sailing Dinghy

If you've just bought a dinghy or are thinking about... Read More

Life Insurance Benefits

Life Insurance is a legal contract between you and a... Read More

Finding Auto Insurance Comprehensive Coverage

You can go online to easily find and quote auto... Read More

Long-Term Care Insurance: Eldercare Solution

When I suddenly had to become a fulltime caregiver to... Read More

Private Medical Insurance- Finding The Right Policy for You

Why Private Medical Insurance Is Becoming So PopularRecent research indicates... Read More

Auto Insurance Rates

Auto insurance rates will vary depending on the insurance agency,... Read More