Thursday, July 27, 2006
HSAs: The triple advantage
[Humberto Cruz, "Tax-advantaged health accounts can help you save on medical costs," The Boston Globe, 27 July 2006.]
Financial advisors and columnists around the country are continuing to recommend the money-saving benefits of health savings accounts - here's an excerpt from a recent article in The Boston Globe:
With insurance premiums rising more than three times faster than salaries, Americans "should be calculating and factoring life-long healthcare expenses into their overall financial planning," said Fidelity's Brad Kimler.
One tool is the health savings account.
"An HSA may not make sense for everyone, but the emerging trend is clearly toward coverage of catastrophic or major expenses rather than all expenses, and putting medical dollars in the hands of consumers to use how they see fit," said Mari Adam, a certified financial planner in Boca Raton, Fla., who has a health savings account. Adam, 48, figures she's saving $200 a month or more in premiums on her policy, and, based on her $1,800 deductible, can contribute $450 each quarter to her account.
"In essence, you are buying real health insurance rather than prepaying [through a higher premium] for medical services you might or might not need," said Vita Nelson, editor of the newsletter The Moneypaper.
"We call it the triple advantage: You put it in tax-free, it grows tax-free, and you pull it out tax-free," said Bob Hurley, vice president of eHealthInsurance.com, an insurance broker. Once you are 65, you can take the money out for any reason without penalties, although you will owe ordinary income tax.
[Devon Herrick, "Health Savings Accounts: The Future of Health Care for Kansans," The Flint Hills Center, 14 February 2005.]
Financial advisors and columnists around the country are continuing to recommend the money-saving benefits of health savings accounts - here's an excerpt from a recent article in The Boston Globe:
With insurance premiums rising more than three times faster than salaries, Americans "should be calculating and factoring life-long healthcare expenses into their overall financial planning," said Fidelity's Brad Kimler.
One tool is the health savings account.
"An HSA may not make sense for everyone, but the emerging trend is clearly toward coverage of catastrophic or major expenses rather than all expenses, and putting medical dollars in the hands of consumers to use how they see fit," said Mari Adam, a certified financial planner in Boca Raton, Fla., who has a health savings account. Adam, 48, figures she's saving $200 a month or more in premiums on her policy, and, based on her $1,800 deductible, can contribute $450 each quarter to her account.
"In essence, you are buying real health insurance rather than prepaying [through a higher premium] for medical services you might or might not need," said Vita Nelson, editor of the newsletter The Moneypaper.
"We call it the triple advantage: You put it in tax-free, it grows tax-free, and you pull it out tax-free," said Bob Hurley, vice president of eHealthInsurance.com, an insurance broker. Once you are 65, you can take the money out for any reason without penalties, although you will owe ordinary income tax.
[Devon Herrick, "Health Savings Accounts: The Future of Health Care for Kansans," The Flint Hills Center, 14 February 2005.]
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