• You pay the monthly premium for a high deductible HSA qualified health insurance plan to the insurance company. High deductible means lower rates.
• You pay your own money, WITHOUT PAYING TAXES ON YOUR DEPOSIT, into a Health Savings Account portion of the plan. You pay this annually, quarterly, monthly, etc.. There are maximums that you can put into your account annually. It is like an IRA, but even better.

Maximum contributions for 2008:

      Individuals:  $2900.

      Families:      $5800.

The HSA account portion of the plan is YOUR MONEY. You just “move it from one pocket to a different pocket,” and the money is completely YOURS BEFORE TAX DOLLARS. The government does require that you use the HSA funds for qualified medical expenses or they access penalties and taxes.

For example, if you choose the FAMILY $5000 deductible, you can put $5650 in the Savings Account for that year. For the INDIVIDUAL plan, with the $2600 deductible, you can put $2850 into the Savings Account. This is YOUR money that you can use to pay your qualified medical expenses. With the savings from your current health insurance premium, that savings alone is enough to put a good deposit in your HSA for a year.

PLEASE NOTE: The deductible on your health insurance plan probably will INCREASE each year. This is dictated by the government and is designed to keep your health insurance premiums at a manageable level.

Even if you drop the health insurance portion of your plan, the Health Savings Account is still YOUR MONEY and still can be used to pay qualified medical expenses and other expenses, with no penalty to you.

If there is money left over in the account at the end of the year, it just rolls over to the next year when you can add additional contributions into your account. This account keeps building up so it’s available for your use of qualified medical expenses.

Michael Scanzello, Glass Financial Group (602) 952-1202