If someone can get their coverage in place before December 31, they can lock in 2007 rates for the next 6 - 24 months, and they can get a tax deduction for contributions made before April 15th.
Fort Collins, CO (PRWEB) December 17, 2007
Last year's "Tax Relief and Health Care Act of 2006" had several provisions that have made it easier to open and fund a Health Savings Account (HSA), including the option of a one-time tax-free rollover from an IRA into the HSA. This change has contributed to the end-of-the-year surge of HSA applications according to leading health insurance broker HSA for America.
"We're getting a tremendous number of inquiries from people who want to know how they can fund their account with money from their IRA," said HSA for America President Wiley Long. "HSA-qualified health insurance plans have high deductibles of $1,100 or more. By doing a tax-free rollover from their IRA, individuals can immediately fund their account so that the deductible can be covered 100%. That basically removes the risk of going with a high-deductible plan."
Health Savings Accounts are special tax-favored savings accounts that anyone with a qualified high-deductible health insurance plan can open and fund. Any money put in the account is tax deductible, and can be used tax-free to pay for future medical expenses. If the money is not withdrawn, it continues to grow tax-deferred like an IRA. HSAs first became available in January 2004, and today nearly eight million people are covered by an HSA-qualified health insurance plan.
"HSA plans have much lower premiums than traditional co-pay plans, but they do have a higher deductible. Medical expenses that someone incurs before they meet their deductible can be paid for from the HSA, but if they've just opened their HSA they may not have had enough time to accumulate much money in it. The tax-free IRA rollover solves that problem," said Long.
Both IRAs and HSAs are special tax-favored accounts that can be funded with tax-free money, and that grow tax-deferred. But HSAs have an additional tax advantage over IRAs: if the money is withdrawn to pay for qualified medical expenses, taxes never need to be paid on those funds. This makes HSAs a much preferred way to save for future medical expenses, according to Long.
"According to Fidelity Investments, the average couple retiring in 2007 will need over $200,000 to cover medical expenses, not even counting dental, over-the-counter medications, or long-term care. And that amount is going up every year. Those who have an HSA could have thousands of additional dollars available to them to cover these expenses in their retirement years."
To help people who are buying their own health insurance understand these changes, HSA for America is hosting weekly HSA teleseminars throughout the rest of 2006. "If someone can get their coverage in place before December 31, they can lock in 2007 rates for the next 6 - 24 months, and they can get a tax deduction for contributions made before April 15th."
The teleseminar is offered to registered participants at no charge. For more information on the teleseminar and how to sign up, please visit our Health Savings Account Teleseminar page.
About HSA for America
HSA for America is the nation's leading independent health insurance firm specializing in individual and family coverage that works with a Health Savings Account. Through our comprehensive website ( http://www.Health--Savings--Accounts.com ) we offer complete information on Health Savings Accounts and qualifying health insurance plans. We offer instant quotes, online health insurance applications, and access to several banks that can act as an HSA administrator for your account.