A few months ago I discussed the High Deducible Health Plan (HDHP) with all of you and we received some great feedback. Review that blog post here! This week I’d like to highlight something that goes hand and hand with the HDHP, the Health Savings Account (HSA)!
When you have a HDHP you are eligible to have a HSA. This is NOT an FSA (Flexible Spending Account). With an FSA if you “don’t use it you lose it” at the end of the year. Whereas the money in an HSA is always yours!
What is an HSA?
An HSA is a savings account that you can put money into for your “qualified healthcare expenses”…TAX FREE! Some employers will set up your HSA for you and give you some or part of that money as part of your benefits package. Others will load that money into your account from your paycheck tax free for you. While others may not set up the HSA or contribute to it, that is still definitely something you can do on your own! Important note – to be eligible to open an HSA as of 2011, your deductible must be at least $1200 if you are a single person, or $2400 on a family plan.
I purchase my own health insurance so I shopped around and found a bank I liked that offered an HSA. Then I move money into that account myself from my paycheck. To ensure I get the tax savings I just have to make sure I take that deduction when I file my taxes each year. Don’t forget, deductions for contributions made to a health savings account are allowed to be taken IN ADDITION TO the standard deduction. (NOTE: If your employer takes the money out for you, it is already pre-tax and therefore there would be no deduction for you to take). For more details and up to date information check Publication 969 from the IRS and discuss all of this with your accountant and/or financial planner.
This sounds like too much work…why bother?
Because by not doing this you are LOSING your hard earned cash! Lets say the government keeps 30% of your paycheck in taxes, and you have a $2,000 deductible. If you have an HSA that covers the amount of your deductible, you’re only spending $2,000. If you didn’t have an HSA you would be spending $600 more because it is post taxes. Yes there can be fees associated with having a health savings account but if you shop around you can find one that keeps them to a minimum and still end up saving. On the flip side of this, remember in many cases when you have a copay plan, the money you pay at your appointments is not tax free. This is something you should take into account when computing which plan is best for you and your family.
And how is this going to make me rich?
The IRS sets limits on how much you can put into an HSA. In 2010 a single person can put $3,050. But what if I don’t meet my deductible? The money stays in my account and accrues interest. What about next year? I can contribute another $3,050 (or whatever they set the maximum at). Even if I use part or all of my deductible, there will still be money in my account. Lets say I keep a HDHP until I turn 65. That is a lot of years! If you stay healthy you could have well over $100,000 set aside in that account. Guess what, once you turn 65 you can use that money on whatever you want (it does NOT have to be related to health care). Sounds like a great way to supplement your savings for retirement!
What does this have to with chiropractic?
It has been our experience that people who make chiropractic a regular/consistent part of their lives are more healthy. They don’t get sick or injured as often, they don’t miss as much time from work…the can enjoy their friends and family more, they have more time for hobbies and traveling, they are happier. In other words, the people who chose chiropractic truly LIVE.
We probably all define “living” differently, just like we probably all have our own definition of what “wealth” is. But no matter your definition, the take home message here is if you can attain more health you will most certainly attain more wealth! Chiropractic can help you attain more health…so what are you waiting for?! Call and make an appointment to get adjusted now. You can’t afford NOT to!