When it comes time to providing a good level of health protection for you and your family, it always pays to shop around a little first. In addition to finding a lower cost, though, there may be some additional savings that you can get out of the deal, too. One of these is by switching to a high deductible health insurance program and adding a Health Savings Account (HSA) on to it.
Get A High Deductible Health Insurance Policy
These programs will work best for those who are in rather good health and who can afford to pay a deductible of a couple of thousand dollars a year. By raising the deductible of your health insurance program to an allowable limit of between $1,050 and $5,250 for singles, and between $2,100 and $10,500 for families, you will greatly reduce your premiums.
Put Money And Deductible Amounts Into Savings
Instead of taking that money saved, though, and spending it, you will want to put it into your Health Savings Account. All money that is put into this account is tax exempt and comes off the top on your 1040. This money is to be used for your deductible and any medical expenses that you have through the year. And all medical expenses that you pay for, that are covered, are tax-free. The money remains under your control at all times and you have the freedom to use it if you want. The one catch, however, is that what you use for non-medical purposes is not tax-free and you will have a ten percent penalty fee with it.
Use To Build A Retirement Fund
The Health Savings Account is building interest all the time and any money that you do not use toward medical expenses stays in the account. This means that the account keeps building, unless you have a lot of medical expenses in a given year. The money is yours and keeps on accruing interest. After a while, if you do not need the money for health reasons, you will have a sizable retirement fund.
Take It Off Of Your Taxes Each Year
The Health Savings Account is a great way to save money. There is a limit, like an IRA, as to how much you can put into the HSA and deduct off of your taxes each year. It means that a single person can put up to $2,700 into the account each year, and a family can put in up to $5,450. Another great thing about an HSA is that you can even wait up until April 15th, when you are calculating your taxes, to see if you need to deposit a little more to get even more of a tax break.
When you get ready to look into a health plan that will provide you with even more savings, you will want to shop around in order to get the best deal for you and your family. There are quite a lot of price differences in health insurance - even for exactly the same features. You will also want to make sure that you obtain your insurance through a reputable and licensed insurer.
Martin Lukac represents http://www.RateEmpire.com, an Internet consumer banking marketplace. RateEmpire.com is a destination site of personal finance, investing, taxes and mortgage rates. RateEmpire.com provides mortgage guides and financial rates and information. RateEmpire.com also operates a financial portal #1 American Financial, found at http://www.1AmericanFinancial.com and San Diego loan portal http://www.LendingSanDiego.com