2020 Health Savings Account Eligible High Deductible Health Plans
Why would you want a 2020 Health Savings Account Eligible High Deductible Health Plan? Because they can save you money.
What is an HSA (Health Savings Account) eligible HDHP (High Deductible Health Plan)?
The HDHP part means it is a health insurance plan that meets IRS qualifications. The qualifications for 2020 include a deductible of at least $1400 for an individual ($6900 at most) or at least $2800 for a family ($13,800 at most). The annual out-of-pocket maximum amount for In-Network services is capped at $6900 for an individual or $13,800 for a family.
The HSA part means you can set up a separate account, which is usually a checking account. You deposit money into this account to be used for the payment of medical expenses.
Why would you want to do this?
The money you put into the HSA is, within limits, tax-deductible. For a 2020 Health Savings account, an individual can contribute up to $3550 and a family can contribute up to $7100 into this account. These contributions can be tax-deductible.
The IRS requires that the money put into this savings account and used only for medical expenses. This can also include costs for prescriptions, dental and vision expenses.
Most people use the funds to pay their copayments, deductibles, and co-insurance when they have a medical event. The beauty of these plans is that they essentially allow you to pay medical expenses with pre-tax money.
If you don’t use your HSA funds in 2020, they will roll into 2021.
As long as you still have an HSA qualified HDHP you can continue to contribute each year. In addition, your funds can continue to grow, maybe even earn tax-free interest through the financial institution you select for your HSA account. Do an online search to find an HSA bank/institution whose terms you like.
Drawbacks:
- You must have an HSA qualified HDHP for the contributions to the HSA to be a tax write off
- The money in the HSA account must be used for medical expenses
- Your health plan will have a deductible of at least $1400
Advantages:
- It can save you money. That’s the bottom line
- Frequently, these plans cost less than alternatives
- Unused funds continue to grow to provide you with a medical emergency reserve
Eventually, you’ll turn 65 and no longer be eligible to contribute to an HSA. But you can continue to use the balance in your HSA account for medical expenses for the rest of your life
As with all IRS plans, there are more details. To get the complete picture and find out if this is a benefit to you, talk to any of our health insurance brokers here at Health Benefits Associates. We can assist you with any health insurance Nevada plan for no additional cost.
