Health Savings Accounts Help Pay for Medical Care When Jobs Are Lost

Monthly mass layoff figures show the companies that have at least 50 initial unemployment claims in a five-week period. According to the Bureau of Labor Statistics, 1,726 mass layoffs in December of last year meant that 153,127 employees lost their jobs.

That was 87 fewer mass layoff events than November of 2009 saw, and that's the lowest level since July of 2008. According to the bureau, the national unemployment rate was 10.0 percent in December of 2009, up from 7.4 percent a year earlier.

If those employees had flexible spending accounts through their employers, they lost all the money along with their jobs. If they had a Health Savings Account (HSA), that money was theirs to keep whether they were unemployed, changed to a new job, or retired.

According to The Wall Street Journal, almost half of U.S. small businesses offer no health insurance benefits at all due to the high cost of insuring employees. Health Savings Accounts give these employers a more economical way to help employees with medical costs. Even though you have control of your HSA, your employer can still make contributions to it.

Unlike a flexible spending account, which does not earn interest, money in a HSA earns tax-free interest so the balance can grow faster than accounts in which earnings are taxed.

If you don't spend the money you contribute to a flexible spending account each year, you lose it at the end of the year. With a HSA, all unused funds and interest are carried over from year to year without limit.

Health Savings Plans Have Tax Advantages

The benefits of a HSA are not just realized while you're saving for future medical expenses. When you pay for qualified medical expenses, withdrawals from a HSA are tax-free, and contributions to a HSA are tax-deductible.

In 2010, individuals can contribute $3,050, and families can contribute $6,150 to a HSA. Contributions can be made with pre-tax dollars through your employer, or you can take a tax deduction if you pay for medical expenses with post-tax dollars.

Your HSA is under your control because you choose the types of investments you want to make your money grow. Certain banks allow you to transfer funds from your checking or savings to your HSA through a secure website.

Paying for qualified medical expenses from a HSA is easy because you can pay medical expenses online from your HSA. You can also get a checkbook or debit card that is linked to your HSA. If you pay for healthcare out of your pocket, you can pay yourself back from your HSA. Just keep receipts to prove that the expenditures are legal.

When you retire, any unused HSA balance can be withdrawn like an IRA so you win whether you do or don't have medical expenses.

HSA Health Plans Come with Lower Insurance Premiums

Many healthy people are dropping health insurance coverage, or switching to bare-minimum policies to lower monthly premiums. Certain of these high-deductible health insurance plans are qualified to work with a HSA. Insurance companies offer these types of plans with lower monthly premiums because the high deductible means they won't have to pay for frequent, numerous small claims.

You can use the money in your HSA to pay for health care costs until the deductible is met. If you have no medical expenses, you've saved that money instead of paying it to an insurance company as higher premiums just in case you might have medical fees. High-deductible health insurance plans can also include a maximum limit on your out-of-pocket medical expenses, including the deductible.

High-Deductible Health Insurance may also provide preventive care without a deductible, or with a deductible that is less than the minimum annual deductible for other products or services. Preventive care benefits can include annual exams, immunizations, prenatal and well child care, stop-smoking programs, and weight-loss programs.

HSA Plans Are Helping More People in Bad Economic Times

Last year, the second largest bank in the country reported significantly more people opened a HSA with branch locations throughout the nation. That bank opened 115,000 new Health Savings Accounts, and accepted $220 million HSA-related deposits in 2009. That one bank now has 500,000 Health Savings Accounts with combined account balances of $740 million.

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<!DOCTYPE HTML PUBLIC '-//W3C//DTD HTML 4.01 Transitional//EN' 'http://www.w3.org/TR/html4/loose.dtd'><html><head><title>Articles Back Link | Health Savings Accounts Help Pay for Medical Care When Jobs Are Lost</title></head><body><h3>Health Savings Accounts Help Pay for Medical Care When Jobs Are Lost</h3><br><br> By: Wiley Long<br><br><p><p>Monthly mass layoff figures show the companies that have at least 50 initial unemployment claims in a five-week period. According to the Bureau of Labor Statistics, 1,726 mass layoffs in December of last year meant that 153,127 employees lost their jobs.</P><p>That was 87 fewer mass layoff events than November of 2009 saw, and that's the lowest level since July of 2008. According to the bureau, the national unemployment rate was 10.0 percent in December of 2009, up from 7.4 percent a year earlier.</P><p>If those employees had flexible spending accounts through their employers, they lost all the money along with their jobs. If they had a Health Savings Account (HSA), that money was theirs to keep whether they were unemployed, changed to a new job, or retired.</P><p>According to The Wall Street Journal, almost half of U.S. small businesses offer no health insurance benefits at all due to the high cost of insuring employees. Health Savings Accounts give these employers a more economical way to help employees with medical costs. Even though you have control of your HSA, your employer can still make contributions to it.</P><p>Unlike a flexible spending account, which does not earn interest, money in a HSA earns tax-free interest so the balance can grow faster than accounts in which earnings are taxed.</P><p>If you don't spend the money you contribute to a flexible spending account each year, you lose it at the end of the year. With a HSA, all unused funds and interest are carried over from year to year without limit.</P><p>Health Savings Plans Have Tax Advantages</P><p>The benefits of a HSA are not just realized while you're saving for future medical expenses. When you pay for qualified medical expenses, withdrawals from a HSA are tax-free, and contributions to a HSA are tax-deductible.</P><p>In 2010, individuals can contribute $3,050, and families can contribute $6,150 to a HSA. Contributions can be made with pre-tax dollars through your employer, or you can take a tax deduction if you pay for medical expenses with post-tax dollars.</P><p>Your HSA is under your control because you choose the types of investments you want to make your money grow. Certain banks allow you to transfer funds from your checking or savings to your HSA through a secure website.</P><p>Paying for qualified medical expenses from a HSA is easy because you can pay medical expenses online from your HSA. You can also get a checkbook or debit card that is linked to your HSA. If you pay for healthcare out of your pocket, you can pay yourself back from your HSA. Just keep receipts to prove that the expenditures are legal.</P><p>When you retire, any unused HSA balance can be withdrawn like an IRA so you win whether you do or don't have medical expenses.</P><p>HSA Health Plans Come with Lower Insurance Premiums</P><p>Many healthy people are dropping health insurance coverage, or switching to bare-minimum policies to lower monthly premiums. Certain of these high-deductible health insurance plans are qualified to work with a HSA. Insurance companies offer these types of plans with lower monthly premiums because the high deductible means they won't have to pay for frequent, numerous small claims.</P><p>You can use the money in your HSA to pay for health care costs until the deductible is met. If you have no medical expenses, you've saved that money instead of paying it to an insurance company as higher premiums just in case you might have medical fees. High-deductible health insurance plans can also include a maximum limit on your out-of-pocket medical expenses, including the deductible.</P><p>High-Deductible Health Insurance may also provide preventive care without a deductible, or with a deductible that is less than the minimum annual deductible for other products or services. Preventive care benefits can include annual exams, immunizations, prenatal and well child care, stop-smoking programs, and weight-loss programs.</P><p>HSA Plans Are Helping More People in Bad Economic Times</P><p>Last year, the second largest bank in the country reported significantly more people opened a HSA with branch locations throughout the nation. That bank opened 115,000 new Health Savings Accounts, and accepted $220 million HSA-related deposits in 2009. That one bank now has 500,000 Health Savings Accounts with combined account balances of $740 million.<br></P></p> <br><br> <b>Author Resource:-></b>  <br><br><b>Article From</b> <a href='http://www.articlesbacklink.com/'>Articles Back Link</a><br></body></html>