Health Savings Accounts (HSAs) combined with high deductible medical plans are considered Consumer Directed Health Plans. They continue to grow in popularity and contractors should take a close look at HSA plans for their employees and families with the new rules under the Tax Relief & Health Care Act of 2006 (HR6111).
The advantages of an HSA plan are more than premium savings. They include tax advantages, financial investments and employee portability of their account. Generally, the higher the deductible for the health insurance plan, the lower the cost for insurance. The more the employee can contribute the more they can benefit from the tax advantage of an HSA which provides tax free payment of medical expenses and/or tax free savings for the long term.
The IRS has announced an increase for 2009 in the maximum allowable contribution for HSAs. Single employee plans can now contribute up to $3,000. Family high deductible health plans can contribute up to $5,950. Employees can contribute up to these maximum amounts regardless of the deductible amount as long as they have a HSA qualified medical plan in place as of December 1, 2009. Employees between 55 and 65 can contribute an additional $1,000 above the maximum noted above for 2009.
The minimum deductible that an HSA qualified health insurance plan can have is $1,150 for employee or self only coverage and $2,300 for family coverage. Deductibles in both cases can be higher than this; however, the maximum out of pocket for the employee only policies is $5,800 and $11,600 for family coverage policies.
HSAs are available through almost all major carriers and ABC Merit Choice® is positioned to implement these for members in addition to a wide variety of other health insurance options. To learn more about the ABC HSA plans, visit www.abc.org/meritchoice or call ABC Merit Choice toll free 1-800-621-2993.