Group Health

Individual Health

Health Savings Account style plans are available for Groups and Individuals. They are a combination of a federally described health insurance plan design and a separate third party qualified savings account. The congressional strategy is to help lower health insurance premiums by using a high deductible plan without the bells and whistles commonly associated with standard PPO and HMO style plans.

To help cover the potential out of pocket costs while the deductible is being met, the government allows the insureds to set aside funds for future medical expenses and those funds will be treated as a full tax credit. Another way to look at it is that the government is subsidizing the out of pocket expenses at a rate equal to your personal tax rate. 

Furthermore, unlike FSAs and HRAs,

• Unused funds deposited into an HSA will roll over and be retained by the insured
• Funds may be deposited by the insured, his employer, or another source
• Savings used for qualified medical expenses may be withdrawn without tax penalty
• Interest earned on the amount is tax deferred
• IRS allowable uses for HSA savings include items not commonly covered by insurance
• Surplus funds may be invested in other vehicles, such as stocks and bonds
• Funds withdrawn for purposes other than medical will be subject to income tax plus a 10% tax penalty
• At age 59 1/2 or later, surplus funds may be withdrawn as if the account was an IRA

HSA Banks

Deductibles:
Minimum deductibles for a plan to qualify as an HSA are defined by the IRS.

While there is no IRS cap on the maximum deductible, there are caps on the amount that a single or family may claim as their annual tax credit. These caps are modified each year with a COLA (Cost Of Living Adjustment). Effective in 2007, a new ruling allows the insured to deposit the maximum allowed even if the deductible is lower.

Benefits:
The original version of HSAs disallowed any copays or benefits until the deductible was attained. There was a great deal of concern over this condition. The argument was that without low co-pays, people would not seek wellness care, such as annual physicals and screenings. Therefore, recently, the IRS has redefined what is allowable. Now all the group plans in New Hampshire include annual physicals, and a list of other wellness benefits, typically with no cost at all.

Some individual plans have been modified to include wellness benefits covered at 100%

Bottom Line:

1. Group HSAs now provide base level wellness care at no out of pocket cost to the patients.
   
2. Employers can slash their annual health care premiums by 20% - 50% depending on the plan design they are currently using.
   
3. Employers may make contributions to the HSAs, coordinate with HRAs, and/or bring in supplemental products to cover areas of exposure.
   
4. Employees may received a reduction in their contribution expense
   
5. Employees have another way to save tax deferred earnings