Smart Health Insurance Shoppers Rush to Beat HSA Dec. 1 Deadline

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Both health care expenses and saving for future medical bills entitle people to tax deductions. HSA for America is helping taxpayers claim those deductions for 2012 by beating the Dec. 1 deadline to get an HSA-qualified health insurance plan in place.

In 2004, one form of health insurance became available that could lead to substantial tax savings for individuals and families. It’s no longer necessary to meet the 7.5 percent threshold to claim tax deductions for health care expenses. In fact, it’s not even necessary to have medical bills in order to claim tax deductions for health care. To claim this deduction for 2012, taxpayers must have an HSA-qualified (Health Savings Account) plan in place by December 1. HSA for America is hosting a live teleseminar Tuesday, November 27, at 5 PM Eastern to answer questions about taking advantage of these tax savings. Click here to register.

The idea that a health insurance policy could reduce taxable income is still relatively new, but more taxpayers have switched to HSA-qualified plans every year since this option was made law. Only one type of health insurance provides tax deductions and HSA for America has three tips to help taxpayers reduce their taxable income.

TIP #1 – To permit the policyholder to claim tax deductions, a health insurance plan must meet certain requirements that are adjusted each year, and the insurance company providing the plan must agree to report qualifying policyholders to the IRS.

To identify qualified policies, look for "Qualifying High Deductible Health Plan" or a reference to "IRC Section 223" on the plan’s declaration page. If this documentation is not available, it is NOT a HSA-qualified plan.

To gain tax deductions for the 2012 tax year, a HSA-qualified health plan must be in effect by December 1, 2012.

TIP #2 – Several leading providers of HSA plans do not accept applications up to the December 1 cut-off date. A couple of insurers have bumped up the deadline to November 15, while several others will pull the plug on November 30. There will also be handful of companies honoring the December 1 deadline.

Once an HSA-qualified policy is in effect, the actual savings account must be set up to facilitate tax deductions.

TIP #3 – To claim a tax deduction for 2012, contributions must be made by April 15, 2013. For self-coverage plans, HSA owners may deposit up to $3,100 and they can claim the entire amount to reduce their taxable income. Those with a family plan may deposit up to $6,250 to claim as a deduction. Individuals age 55 or older may contribute an additional $1,000 to either type of plan account.

HSA plans provide coverage similar to that of other high-deductible health plans, but only HSA plans allow policyholders to claim contributions as “above the line” tax deductions. In addition to the live question-and-answer teleseminar, educational resources are available online on our website to help people start their own HSA.

About HSA for America:

As the nation's leading independent HSA expert, HSA for America has earned a reputation for providing superior educational resources for individuals, families and small businesses. With its comprehensive website, consumers can evaluate high-deductible health insurance plans that allow them to establish an HSA.

Guidelines for selecting an HSA administrator based on fees and investment options are readily available here. Topics to help consumers maximize their savings on premiums and taxes can be found on our How-to guide.

Consumers may access HSA for America’s instant quote engine and online applications or request individualized assistance. Confidential consultations regarding HSA Plans and Health Reimbursement Arrangements may be arranged by calling 1-866-749-2039 from 9 AM through 11 PM Eastern.

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Wiley Long
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