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Taking Action Now can Lower Your Health Costs and Tax Burden in 2006










Fort Collins, CO (PRWEB) November 29, 2005

Health savings accounts (HSAs) enable individuals to set up tax-favored accounts that can be used to pay for medical expenses that are not covered by their health insurance. Individuals are eligible for an HSA only if they have a qualifying high deductible health insurance plan with an annual deductible of at least $ 1,100 for individual plans, or $ 2,100 for family plans. Because these plans have higher deductibles, premiums are usually at least 30% lower than typical PPO plans.

Any money deposited in the HSA is tax deductible. For 2006 there is a contribution limit of $ 2,700 for individuals, and $ 5,450 for a family. Funds can be withdrawn from the account tax-free at any time to pay medical expenses, including doctor visits, prescription drugs, dental, eyeglasses, and even over-the-counter medications like aspirin. Money that is not withdrawn for medical expenses grows tax-deferred like an IRA, and can be withdrawn penalty-free at age 65 for any reason.

Experts recommend having your HSA in place by January 1 in order to maximize your tax benefits. “Contribution limits are pro-rated based on the total number of months during the year in which you have a qualifying health plan”, says Wiley Long, president of HSA for America, an online health insurance agency specializing in HSA-qualified plans. “Additionally, most insurance companies offer a one-year rate guarantee, so by getting coverage in place before January 1st, people will not only be able to maximize their tax deductions but they may also be able to lock in 2005 rates for the next 12 months”.

Long gave an example of a family that reduced their premium from $ 458 per month to $ 305, saving them $ 1836 in premiums over the course of a year. “If they deposit $ 5,450 in their health savings account, they may save another $ 1,526 in federal income taxes. People are realizing that the lower premiums combined with the tax savings can reduce their total health costs by 50% or more.”    

Long recommends that individuals and families interested in lowering their health insurance costs should take action immediately, since it can take two to three weeks to get a new plan in place.

More information about how HSAs work, along with instant quotes on qualifying high deductible health insurance plans, can be found at http://www.HSAforAmerica.com, or by calling 866-254-5121.

About HSA for America:

HSA for America is a nationwide brokerage firm specializing in individual and family health insurance plans that are qualified to work with Health Savings Accounts. HSA for America represents many different insurance companies, offers instant quotes, online applications, and comparisons of HSA administrators.

Contact Information:

Fred Adams

HSA for America

Toll-Free: (866) 254-5121

Fax: (866) 284-0082

http://www.HSAforAmerica.com

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