Introducton – The “insurance” is commonly used in the United States to describe any program that helps pay medical expenses, either through private insurance, social security or non-insurance program of social protection funded by the government. Synonyms for this usage include “health coverage,” coverage of health care “and” health benefits “and” health insurance. “In a technical sense, the term used to describe any form of insurance protecting against injury or disease.
In the U.S., the health insurance industry has changed rapidly in recent decades. In the 1970 most people had health insurance had liability insurance. indemnity insurance is often called fee. This is the traditional health insurance was paid the doctor (usually a doctor or hospital) a fee for each service provided to patients covered by the policy. In one of the categories associated with compensation programs is that consumer-driven health (CASS). plans for the health of consumers took the individuals and families to have more control over their care, including when and how access to care, what care they receive and how much they spend on health care services.
These plans are however associated with higher deductibles that policyholders must pay out of pocket before you can claim the insurance money. Consumer Driven Health Care Plans include plans for repayment of Health (HRA), Flexible Spending Accounts (FSA), health plans high deductible (HDHP), Archer medical savings accounts (CES) and savings accounts health (HSA). Among them, the savings accounts are the latest health and have grown rapidly over the past decade.
What is a savings account for health?
A health savings account (HSA) is a savings account with tax benefits for taxpayers U.S. physicians. The account funds are not subject to federal income tax at the time of presentation. Can be used to pay medical expenses at any time without federal tax liability.
Another feature is that the funds contributed to health savings account and accumulate around from year to year if not spent. These can be removed by the workers after retirement with a tax liability. Withdrawals of eligible expenses and accrued interest are not subject to federal income tax. According to the U.S. Office Finance, “A Health Savings Account is an alternative to traditional health insurance is a savings product that offers a different way for consumers to pay for health care.
HSAs allow you to pay for current health expenses and save for future qualified medical and retiree health care on a tax-free. Therefore, the savings account for health is an effort to increase the efficiency of U.S. health care and encourage people to be more responsible and careful about their health care needs. Falls into the category of consumers due to health care plans.
Origin of the Health Savings Account
The health savings account account was opened under the Medicare Prescription Drug, Improvement and Modernization Act passed by U.S. Congress in June 2003 by the Senate in July 2003 and signed by President Bush 08 December 2003.
The following persons are eligible to open a savings account for health -
- Those who are covered by a health plan with high deductible (HDHP).
- Those who are not covered by other health insurance plans.
- Those who are not enrolled in Medicare4.
There is no limit of personal income that could contribute to an A and is not necessary to have an earned income to contribute to an A. However, he has can not be applied by those who depend on the tax return of another person. HSA also can not be set independently by the children.
What is a health plan with high deductible (HDHP)?
Enrollment in Health Plan High Deductible (HDHP) is a prerequisite for anyone wanting to open a savings account for health. In fact, the HDHP had an impulse to the Medicare Modernization Act, which introduced the HSA. A high deductible health insurance plan is a disease that has a deductible threshold. This limit must be reached before the insured can claim the insurance money. It does not cover first dollar medical expenses. Therefore, a person has to pay the upfront costs that are called pocket expenses.
In a series of HDHP cost of vaccination and preventive health care are excluded from the franchise which means that the individual is reimbursed for them. HDHP may be taken both by individuals (self-employed and employees) and employers. In 2008, HDHP offered by insurance companies in the U.S. with deductibles ranging from a minimum of $ 1,100 for self coverage and $ 2,200 for individuals and families. The pocket maximum for HDHPs is $ 5,600 per car and $ 11,200 for registration and your family. These limits are called IRS allowable limits as defined by the Internal Revenue Service (IRS). HDHP on the relationship between deductibles and premiums paid by the insured is inversely propotional say the opening, the lower the premium, and vice versa. The main advantages of course HDHP is a health-care costs) attention that cause patients to become more aware of costs, and b) insurance premiums more affordable for the uninsured. The logic is that when patients are fully covered (eg health plans with low deductibles) tend to be less health conscious and cost conscious so during the transition process.
Open a health savings account
A person can enroll in the GGC with banks, credit unions, insurance companies and other authorized companies. However, all insurance companies offer insurance plans HSAqualified It is therefore important to use an insurance company offering this type of insurance scores. Also, an employer may establish a plan for employees. However, the account remains the property of the person. Register online direct insurance for HSA qualified health is available in all states except Hawaii, Massachusetts, Minnesota, New Jersey, New York, Rhode Island, Vermont and Washington.
Contributions to savings Health
Contributions to HSAs can be made by a person who owns the account, by an employer or anyone else. When done by the employer’s contribution is not included in the employee’s income. When done by an employee, is treated as exempt from federal income tax. For 2008, the maximum amount that can be paid (and deducted) to an HSA from all sources:
$ 2900 (self-only coverage)
$ 5,800 (family coverage)
These limits are set by Congress through legislation and are indexed annually for inflation. For people over 55 years, there is a problem of a special offer that allows them to deposit more than $ 800 for 2008 and $ 900 for 2009. The maximum amount of a real person can contribute also depends on the number of months, is covered by an HDHP (prorated) on the first day of a month. For example, if you have family HDHP coverage as of January 1.2008 on June 30, 2008, and then no longer have HDHP coverage, you are allowed an HSA contribution of $ 5,800 or 12.6 per $ 2,900 for the year 2008. If you have family HDHP coverage as of January 1.2008 on June 30, 2008, and has self-only HDHP coverage July 1, 2008 to December 31, 2008, allowed an HSA contribution of $ 5,800 x 12.6 more 12.6 $ 2,900 or $ 4.350 for 2008. If a person opens an HDHP on the first day of a month, can contribute to the HSA on the first day itself. However, if he or she opens an account on a day other than the first, then you can contribute to the HSA from next month. Contributions can be made as late as April 15th next year. Contributions to the HSA beyond the contribution limits must be withdrawn by the person or subject to an excise tax. The person must pay tax on the excess amount withdrawn.
The employer can make contributions to an employee has an account on a salary reduction plan known as the Section 125 plan. It is also called a cafeteria plan. Contributions under the card plan are made in a pre-tax, say they are excluded from employee income. The employer must make contributions on a comparable basis. comparable contributions are all HSA contributions by an employer, which are: 1) the same amount or 2) the same percentage of the annual deductible. However, part-time employees who work less than 30 hours per week can be treated separately. Employers may also classify workers who opt for individual coverage and those opting for family coverage. The employer can automatically make contributions to the SSA on behalf of the employee unless the employee specifically opts not that their contributions by the employer.
Withdrawals from the HSA
The ASC is owned by the employee and he / she may be eligible expenditures if necessary. He / she also decides how much to contribute, how to withdraw from the eligible expenses, the company has and these investments will be made to develop the account. Another feature is that the funds remain in the account and the role each year. It is no use or lose rules. HSA participants do not have to obtain prior approval from their HSA administrator or insurer to withdraw funds, and funds are not subject to income tax if it were made for “qualified medical expenses. Eligible medical expenses include the costs of services and products covered by the health plan, but subject to cost sharing, such as the deductible and coinsurance or copayments, as well as many other expenses not covered by physicians, such as dental, vision and chiropractic care, durable medical equipment, such as eyeglasses and hearing aids, transportation costs and medical care. the-counter, nonprescription drugs are also eligible. However, qualified medical expenses must be incurred after the HSA was established.
tax-free distributions can be withdrawn from the HSA for medical expenses for individuals covered by the HDHP spouse (even if not included) of the person and their dependents (even if not covered) of individual.12 The HSA also can be used to pay eligible expenses for the previous year, provided that such expenses were incurred after the HSA was established. The person must keep receipts for expenses covered by HSA, as may be necessary to prove that the withdrawals were made from the HSA for qualified medical expenses, not otherwise used. Thus, the individual may have to produce income before the insurance company to prove that the exemption limit has been reached. If the withdrawal is made for qualified medical expenses, then the amount withdrawn is taxable (which is added to income) and is also subject to an additional penalty of 10 percent. Typically, the money can not be used to pay health insurance premiums. However, under certain circumstances, be waived.
These are -
1) to pay for any other medical insurance while receiving unemployment benefits or the federal government.
2) COBRA continuation coverage after leaving employment with a company that provides health insurance coverage.
3) qualified insurance long term care.
4) health insurance premiums and expenses out of pocket, including deductibles, co-payments and co-insurance: Part A (hospital services and hospital), Part B (medical services and outpatient care) Part C (Medicare HMO and PPO) and Part D (drugs).
However, if a person dies, becomes disabled or reaches age 65, withdrawals from health savings account are considered exempt from income tax and another 10 percent penalty regardless of the purpose for which such deductions are made. There are several methods by which funds can be withdrawn from the SSA. Some HSA account holders offer debit cards, with some controls and some options for a reimbursement process similar to medical insurance.
The growth of the HSA
Since savings accounts for health have been established in January 2004 has been phenomenal growth in their numbers. Approximately 1 million members in March 2005, the number grew to 6.1 million members in January of 2008.14, representing an increase of 1.6 million since January 2007, two nine million from January 2006 to 5.1 million since March 2005. This growth was visible in all segments. However, the growth in large groups and small groups was much higher than in the individual category. Projections by the U.S. Treasury Department, the number of HSA policyholders will increase to 14 million in 2010. These policies will be 14 million to provide coverage of 25 to 30 million U.S. citizens.
In the individual market, 1,500,000 people were covered by HSA / HDHP purchased in January 2008. Based on the number of people covered, 27 percent of new personal political gain (defined as those acquired in the most recent full month or quarter) were enrolled in the HSA and HDHP coverage. In the small group market, the number rose to 1.8 million in January 2008. In this group, 31 percent of all new records in the HSA / HDHP category. The large group category has the highest enrollment, with 2.8 million members from January 2008. In this category, six percent of all new records in the HSA / HDHP category.
Advantages of SSA
Proponents of the SSA into account a number of benefits from them. Firstly because it is considered to have a high threshold frank, the insured will be more health conscious. They are also more aware of costs. High deductibles people to pay more attention to their health and the cost of health care and make the shop for bargains and be more vigilant against the excesses of the industry of healthcare. It is believed, will reduce the rising cost of health care and increase efficiency of health care in the United States. HSA eligible plans typically provide tools to support decision enlisted to understand, to some extent, information on the cost of services of health and quality of providers of health care. Experts suggest that reliable information on the cost of certain health services and the quality of some health care providers to assist registrants to participate more actively in making decisions to purchase health care. These tools can be provided by the health insurance plan to all the social health insurance, but may be more important than record HSA eligible plans have a greater incentive to take decisions on the quality and cost of suppliers health care and services.
It is believed that the lower premiums associated with HSA / HDHP allow more people enroll in health insurance. This means that low-income groups without access to Medicare will be able to open HSAs. certainly greater franchises associated with HDHP HSA law, but an estimated tax savings and lower premiums CGS are less expensive than other insurance plans. HSA funds can be transferred from year to year. It is no use or lose rules. This leads to an increase in the savings account holder. The funds can accumulate tax-free for future medical expenses, if the owner wants. In addition, savings in the HSA can be cultivated through investment.
The nature of these investments is determined by the insured. The remuneration of savings in the HSA are also exempt from income tax. The holder can withdraw their savings in the HSA after 65 years without paying taxes or penalties. The account holder has full control over your account. He / She is the owner of the account since its inception. A person can withdraw cash when needed without goalkeeper. So the owner decides how much to put into your account, how much to spend and how much to save for the future. HSAs are portable in nature. This means that if the holder changes jobs, lost their jobs or moved to another place, he / she can still keep the account.
Also, if the account holder may want to transfer your savings account management organization of health to another. Therefore, portability is an advantage of HSAs. Another advantage is that most HSA plans offer full coverage for preventive care. This is true for virtually all HSA plans offered by large employers and over 95% of the plans offered by small employers. It is also true of more than half (59%) plans that are purchased by individuals.
All plans offer benefits for the first dollar preventive care including annual physicals, immunizations, wellchild well baby care, mammograms and Pap smears, 90% include the detection of prostate cancer and 80% understood the colon cancer screening. Some analysts believe that HSAs are more attractive to the young and healthy, as they often do not pay the cost out of pocket. On the other hand, should pay lower premiums for HDHP to help them respond to unforeseen circumstances.
Medical savings accounts are also good for employers. The advantages of choosing a savings account at a traditional health insurance plan can directly affect the budget bottom line benefit of an employer. For example, savings accounts rely on a health insurance policy with high deductible, which reduces employee plan premiums. Also all the contributions to Medical Savings Account are pre-tax, reducing payroll and reducing the amount of taxes, the employer must pay.
Opponents of the savings accounts for health say that would do more harm than good to the U.S. healthcare system insurance. Some consumer groups such as Consumers Union, and many medical organizations, such as the American Public Health Association, the SSA rejected because they believe that only benefit the young and healthy, and make the health care system more expensive for all. According to economist Victor Fuchs of Stanford, “The main effect of putting more of it on the consumer to reduce the social redistributive element of insurance.
Some others believe that the HSA to remove the healthy reserve and insurance premiums are increasing all left. HSAs encourage people to feel more and diversify the lowest risk. Another concern is that people with money, except in the CGS will be insufficient. Some people believe that the ASC does not provide enough savings to cover costs. Even the person who brings the most and never takes the money would not be able to cover health care costs in retirement if inflation continues in the industry of healthcare.
Opponents of the CGS, is also distinguished as the state Insurance Commissioner Garamendi figures Juan, who spoke of a “dangerous recipe” that destabilize the health insurance market and make things even worse for the uninsured. A second criticism is that most benefit the rich and the poor. Those earning more will be able to get more tax benefits than those earning less. Critics say the increased insurance deductibles and premiums will remove most of the income of low income. lower income groups will not benefit substantially from tax exemptions because they already pay little or no taxes. On the other hand tax breaks in economies in Africa and additional income from these savings HSA will cost billions of dollars in tax revenue to the exchequer.
The Treasury Department said the HSA would cost the government $ 156 million over a decade. Critics say this could increase significantly. Several investigations have been conducted on the effectiveness of the SSA and some have found that account holders are not particularly happy with the HSA system, and many are still ignorant about the functioning of the SSA. This 2007 study of American workers human resources consulting firm Towers Perrin showed the satisfaction of health plans based on the account (ABHPs) was low. People were not happy with them, usually in relation to people with more traditional health care. Respondents said they felt uncomfortable with the risk and did not understand how it works.
According to the Commonwealth Fund, the first experiences with the health HA eligible high-deductible plans reveals low satisfaction, high out of pocket costs and access issues related to costs. Another study with the Employee Benefits Research Institute found that people enrolled in health plans HSA eligible High Deductible were much less satisfied with many aspects of their health as adults more popular in these plans detailed plans for allocating of substantial amounts of income on health care, especially those with poorer health or lower incomes. The survey also found that adults in terms of high-deductible health are much more likely to delay or avoid needed care, or to skip medications, because of cost. The problems are particularly pronounced among those in poor health or lower incomes.
Political leaders have also heard of his criticism of the SSA. Congressman John Conyers, Jr. issued the following statement criticizing the ASC “The president’s plan for health care is on the cover of the insured, insurance is affordable or lower cost health care. Their real goal making it easier for companies to dump their health insurance costs for employees, give tax breaks to the wealthy, and increase the profits of banks and financial intermediaries. The health policies devised at the request of the special interests do not does nothing to help the average American. In many cases, can make health care more accessible. “In fact, a report by the U.S. Office Government Accountability, published April 1, 2008 indicates that enrollment in HSA is higher for people with higher incomes than those with low incomes.
A study entitled “Health savings accounts and health plans with high deductibles, are an option for low-income families by Catherine Hoffman and Jennifer Tolbert was sponsored by the Kaiser Family Foundation has presented the following conclusions on HSA?:
premium) for health plans HSA qualified to be lower than traditional insurance, but these plans shift financial risk to individuals and families through higher deductibles.
b) Premiums and costs out of pocket for health plans HSA qualified to consume a significant portion of the budget of a low-income family.
c) Most low-income individuals and families do not suffer high enough tax liability to benefit significantly from the tax deductions related to the CGS.
d) People with chronic diseases, disabilities, and others with expensive medical needs may face even more costs reimbursable under health plans HSA qualified.
e) cost-sharing reduces the use of health services, including primary and preventive services, and low-income people and those who are sicker are particularly sensitive to increased cost-sharing.
f) savings accounts and health plans with high deductibles, are not likely to significantly increase insurance coverage among the uninsured.
Choosing a health plan
Despite the advantages offered by the HSA, it may not suit everyone. When choosing an insurance plan, a person must take into account the following factors:
1. Premiums payable.
2. Coverage and benefits under the plan.
3. Several exclusions and limitations.
5. Out of pocket costs, such as coinsurance, copayments and deductibles.
6. Access to doctors, hospitals and other providers.
7. How much and how often you pay for care.
8. Any health problems or physical disabilities.
9. Type of tax savings available.
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