Pros And Cons Of Healthcare Savings Accounts

Colling Insurance Services, Inc. Lakewood, CO is dedicated to providing practical solutions to its client’s insurance needs.  The Affordable Care Act  (Obamacare) is going through dramatic changes by the new tax law that repealed the ACA mandate. Health tax-free savings accounts are promoted to offer a healthcare plan for individuals to put aside savings to help pay their medical costs. 

The following  federal guidelines must be met to be qualified to set up an HSA:

*    Not eligible for Medicare while you can still use an HSA if the HSA exists before being enrolled in Medicare. But you cannot continue  contributing to your HSA
*    A  High-Deductible Health Plan (HDHP) must be in place when setting up an HSA 
*    HSA can only pay for qualified medical expenses 
*    Not a dependent according to an IRS determination of another’s return

The healthcare savings accounts have been both praised and criticized.


*  Pay for healthcare expenses
*  While individually owned anyone can contribute to your HSA including your employers 
*  Pre-tax contributions which reduce Federal taxable gross income including most states taxable income 
*  Interest accrued or any assets in HSA’s are tax-free
*  HSA funds roll over annually
*  HSA funds are available regardless of changes in health care insurance plans, changes in employer and upon retirement.
*   Debit cards are available to distribute HSA funds and access funds at ATMs


* The requirement for an HDHP
*  Unexpected health care costs when no HSA funds available 
*  Difficult to save money for HSA
*  Non-qualified expenses are taxable with a penalty before reaching retirement age of 65 
*  Must keep good records and receipts
*  Monthly bank maintenance fees

Colling Insurance Services, Inc. Lakewood, CO will keep you advised of the changes in healthcare.  Please call!