Archive for the ‘Acne’ Category
Learn How to Use Your Health Savings Account to Pay for Dental Expenses
Paying too much for coverage and not having enough coverage may be a familiar scenario for many of the residents in America. Not many health insurance companies offer policies with coverage that will give you dental, eye and alternative care. Americans are spending over $30 billion annually just for dental services and most of it is out of their own pocket. The prices for dental care can be very horrid, ranging between $850 to $1,000 for crowns, $150 for check-ups and cleaning and thousands of dollars for oral surgery.
Most of the dental plans available are expensive – the reason being that the insurance companies know that the individuals who purchase dental coverage already have dental problems and will definitely be using the coverage. This is also known as “adverse selection”.
Another option is available today with the HSA, or Health Savings Account. This is an account that you can use to accumulate tax-free dollars for medical bills that aren’t covered under your High Deductible Health Plan, or HDHP. It is required that you are enrolled in a HDHP to qualify for an HSA. These plans have high annual deductibles, but you receive low monthly premiums in exchange. Since the money in the HSA is tax-free, the account holder can funnel their dental expenses through the HSA for a tax write-off.
If you decide to get a health plan with dental coverage, the deductible cannot be paid for with the HSA, but the expenses rendered from services can. Since you’ll be funding your account with pre-tax dollars, you can easily save $500 or more off the costs of your family’s yearly dental expenses by paying for the charges from your Health Savings Account.
There are some other options for dental coverage available. With prepaid dental plans you will be charged low monthly fees, which are usually around $7/month for individuals and $16/month for families. The plans give you significant discounts on check-ups, fillings, extractions and other dental services provided by a network dentist. Some plans help with the expenses for eyeglasses and contact lenses. Since these plans aren’t insurance, it can be paid for with the HSA. When calculating what medical expenses will be reimbursed from your HSA, include dental fees and premiums from the prepaid dental plan.
More About Health Savings Accounts
Any health expenses that aren’t covered under you HDHP can be paid for with your HSA, such as deductibles, eyewear and dental care. As long as the bill you are trying to cover was needed for a health problem, it can be paid for. So if you decided to get a massage while at the spa – this wouldn’t be covered, but if your doctor recommended that you go to a masseuse after a painful accident; this would be covered. Having an HSA is the way health insurance should be – you get to choose what medical help you receive for your health conditions.
This means if you decide to get alternative medicine instead of going to an allopathic physician (conventional doctors that use prescriptions drugs and other treatments for quick-fixes instead of delving to the root of the problem), you can do so and have the expenses paid with the HSA.
What is Considered an “HSA Qualified Expense”?
The definition of qualified medical expenses is only partially given in the IRS Publication 502 and through various federal court rulings. There are few restrictions – as long as the expenses are for medical treatments or prevention for a health problem. For instance, yoga wouldn’t be identified as a medical expense unless your doctor recommended it as a treatment for medical reasons, such as for physical therapy after an injury, then it is qualified as a medical expense.
Many may question why the government would give a tax deduction for someone using some crazy vibration machine to cure their cancer. Again, the HSA is how health insurance should be. You should get to choose what treatments would best benefit your health condition. This gives account holders that power to manage their health as they see fit. Health Savings Accounts are encouraging individuals to take personal responsibility of their health care while loosening the monopoly traditional health care has had over the past couple of decades.
By: Wiley Long
About the Author:
Most of the dental plans available are expensive – the reason being that the insurance companies know that the individuals who purchase dental coverage already have dental problems and will definitely be using the coverage. This is also known as “adverse selection”.
Another option is available today with the HSA, or Health Savings Account. This is an account that you can use to accumulate tax-free dollars for medical bills that aren’t covered under your High Deductible Health Plan, or HDHP. It is required that you are enrolled in a HDHP to qualify for an HSA. These plans have high annual deductibles, but you receive low monthly premiums in exchange. Since the money in the HSA is tax-free, the account holder can funnel their dental expenses through the HSA for a tax write-off.
If you decide to get a health plan with dental coverage, the deductible cannot be paid for with the HSA, but the expenses rendered from services can. Since you’ll be funding your account with pre-tax dollars, you can easily save $500 or more off the costs of your family’s yearly dental expenses by paying for the charges from your Health Savings Account.
There are some other options for dental coverage available. With prepaid dental plans you will be charged low monthly fees, which are usually around $7/month for individuals and $16/month for families. The plans give you significant discounts on check-ups, fillings, extractions and other dental services provided by a network dentist. Some plans help with the expenses for eyeglasses and contact lenses. Since these plans aren’t insurance, it can be paid for with the HSA. When calculating what medical expenses will be reimbursed from your HSA, include dental fees and premiums from the prepaid dental plan.
More About Health Savings Accounts
Any health expenses that aren’t covered under you HDHP can be paid for with your HSA, such as deductibles, eyewear and dental care. As long as the bill you are trying to cover was needed for a health problem, it can be paid for. So if you decided to get a massage while at the spa – this wouldn’t be covered, but if your doctor recommended that you go to a masseuse after a painful accident; this would be covered. Having an HSA is the way health insurance should be – you get to choose what medical help you receive for your health conditions.
This means if you decide to get alternative medicine instead of going to an allopathic physician (conventional doctors that use prescriptions drugs and other treatments for quick-fixes instead of delving to the root of the problem), you can do so and have the expenses paid with the HSA.
What is Considered an “HSA Qualified Expense”?
The definition of qualified medical expenses is only partially given in the IRS Publication 502 and through various federal court rulings. There are few restrictions – as long as the expenses are for medical treatments or prevention for a health problem. For instance, yoga wouldn’t be identified as a medical expense unless your doctor recommended it as a treatment for medical reasons, such as for physical therapy after an injury, then it is qualified as a medical expense.
Many may question why the government would give a tax deduction for someone using some crazy vibration machine to cure their cancer. Again, the HSA is how health insurance should be. You should get to choose what treatments would best benefit your health condition. This gives account holders that power to manage their health as they see fit. Health Savings Accounts are encouraging individuals to take personal responsibility of their health care while loosening the monopoly traditional health care has had over the past couple of decades.
By: Wiley Long
About the Author:
Wiley Long – President, HSA for America . HSA for America makes it easy to learn about and set up a health savings account that best meets your needs.
Joellen Eidemiller
How to Manage Health Savings Accounts
Health Savings Accounts consist of two parts – the high deductible health plan (HDHP), and the Health Savings Account (HSA) itself. By carefully choosing which bank you use to establish your HSA, and strategically choosing how to fund your account and manage your investment, you will be able to get the most return on your money while keeping your expenses to a minimum.
Make Sure to Establish Your Health Savings Account
By switching from a conventional copay health insurance plan to a high-deductible health insurance plan (HDHP), most people are cutting their health insurance costs by about 40% or so. This is such a big savings, that many people neglect to take the next step and set up their HSA. But this is a financial mistake that is costing them money.
Unless you pay no income tax and have zero medical expenses (including dental, over-the-counter medications, or charges for alternative care like chiropractic or acupuncture), you will absolutely save money by establishing your HSA. Just find a good HSA Administrator and get started.
Run All Your Medical Expenses Through Your HSA
Not everyone feels like they have “extra” money that they afford to set aside in their HSA, despite the tax savings and other financial benefits. Even if that’s the case, you should still establish your HSA. Every time you incur a medical expense, deposit at least as much money as you spent on that medical expense. For instance, if you went to the dentist and it cost $85, put $85 in your HSA. If you like you can then take it right back out.
What this does is convert this medical expense into a tax-deductible expense. Then when you file your taxes next year, you can put the total amount that you ran through your HSA on line 25 of your 1040, and deduct it from the total income you report.
Cover Your Deductible
Your next step is to get enough money in your HSA to cover your deductible. For 2008, deductibles range from $1100 to $5600 for individuals, and $2200 to $11,200 for families. Annual contribution limits are $2900 for individuals, and $5800 for families. So it could take a couple years or longer to get enough money in your account to cover your deductible.
Once this money is in your HSA, you will have the confidence of knowing that you can cover most any medical expense that comes your way, particularly if you have a health insurance plan that pays 100% after your deductible.
As you continue to build money in your account, you may want to consider switching to a health insurance plan with an even higher deductible, which will further lower your premiums.
Minimize the Fees You Pay
If you will be using your HSA to pay medical expenses as you incur them, you should keep an eye on the fees your bank charges. Until you have enough money in your account to cover any fees with investment returns, you probably want to have your HSA with a bank that charges no fees. (Several are listed on the website referenced above).
If you plan to access money from your HSA to pay ongoing medical expenses, you may wish to keep a portion of your HSA money in a savings account or short-term CD. But to take maximum advantage of your HSA, you’ll want to eventually move some of the funds to investments that have a higher potential return.
Investment Options
No other investment has the triple tax-advantage that Health Savings Accounts offer. Not only is your Health Savings Account deposit tax deductible, and your withdrawals to cover medical expenses tax-free, but your investment also grows tax-deferred make Health Savings Accounts a great investment option.
Taking advantage of tax-deferred growth is one of the best ways to build long-term savings. Some banks will provide a short list of mutual funds you can invest in, while others provide access to an online discount brokerage such as Ameritrade where you can choose from stocks, bonds, mutual funds, and more.
The most aggressive strategy is to pay your medical expenses from somewhere other than your HSA, and save the receipt. You can then reimburse yourself at a later date. The additional growth you get from not paying any taxes on your investment may be enough to cover all your medical expenses.
By: Wiley Long
About the Author:
Make Sure to Establish Your Health Savings Account
By switching from a conventional copay health insurance plan to a high-deductible health insurance plan (HDHP), most people are cutting their health insurance costs by about 40% or so. This is such a big savings, that many people neglect to take the next step and set up their HSA. But this is a financial mistake that is costing them money.
Unless you pay no income tax and have zero medical expenses (including dental, over-the-counter medications, or charges for alternative care like chiropractic or acupuncture), you will absolutely save money by establishing your HSA. Just find a good HSA Administrator and get started.
Run All Your Medical Expenses Through Your HSA
Not everyone feels like they have “extra” money that they afford to set aside in their HSA, despite the tax savings and other financial benefits. Even if that’s the case, you should still establish your HSA. Every time you incur a medical expense, deposit at least as much money as you spent on that medical expense. For instance, if you went to the dentist and it cost $85, put $85 in your HSA. If you like you can then take it right back out.
What this does is convert this medical expense into a tax-deductible expense. Then when you file your taxes next year, you can put the total amount that you ran through your HSA on line 25 of your 1040, and deduct it from the total income you report.
Cover Your Deductible
Your next step is to get enough money in your HSA to cover your deductible. For 2008, deductibles range from $1100 to $5600 for individuals, and $2200 to $11,200 for families. Annual contribution limits are $2900 for individuals, and $5800 for families. So it could take a couple years or longer to get enough money in your account to cover your deductible.
Once this money is in your HSA, you will have the confidence of knowing that you can cover most any medical expense that comes your way, particularly if you have a health insurance plan that pays 100% after your deductible.
As you continue to build money in your account, you may want to consider switching to a health insurance plan with an even higher deductible, which will further lower your premiums.
Minimize the Fees You Pay
If you will be using your HSA to pay medical expenses as you incur them, you should keep an eye on the fees your bank charges. Until you have enough money in your account to cover any fees with investment returns, you probably want to have your HSA with a bank that charges no fees. (Several are listed on the website referenced above).
If you plan to access money from your HSA to pay ongoing medical expenses, you may wish to keep a portion of your HSA money in a savings account or short-term CD. But to take maximum advantage of your HSA, you’ll want to eventually move some of the funds to investments that have a higher potential return.
Investment Options
No other investment has the triple tax-advantage that Health Savings Accounts offer. Not only is your Health Savings Account deposit tax deductible, and your withdrawals to cover medical expenses tax-free, but your investment also grows tax-deferred make Health Savings Accounts a great investment option.
Taking advantage of tax-deferred growth is one of the best ways to build long-term savings. Some banks will provide a short list of mutual funds you can invest in, while others provide access to an online discount brokerage such as Ameritrade where you can choose from stocks, bonds, mutual funds, and more.
The most aggressive strategy is to pay your medical expenses from somewhere other than your HSA, and save the receipt. You can then reimburse yourself at a later date. The additional growth you get from not paying any taxes on your investment may be enough to cover all your medical expenses.
By: Wiley Long
About the Author:
Wiley Long – President, HSA for America . HSA for America makes it easy to learn about and set up a health savings account that best meets your needs.
Gordon