HSA plans almost always offer the best and least-expensive coverage.  Take the time to investigate them:

• There are two parts to an HSA type of plan. The first part is a High Deductible Health Plan, sometimes called High Deductible Health Insurance.  The second part is a savings account that you open up in a bank.  That account is called a Health Savings Account.  (It is very similar to an IRA - Individual Retirement Account.) 

• The first part: a High Deductible Health Plan (HDHP)? The HDHP is typically configured to pay 100% of your covered expenses after you have met your deductible amount.  There are no copays for doctors, or drugs, but most people find that this is the least expensive way to insure yourself and your family.  Why?  Because since the insurance company doesn't have to pay their portion of the copays, it costs them less...so they charge less.

  The second part: Health Savings Account:  With an HSA plan, you not only save money on your insurance premium, in 2007, you can put up to $2,850 for an individual, and $5,650 for a family into a savings account – a Health Savings Account.  By merely putting this money into a special savings account, you get a tax deduction when you do your taxes.  It is very similar to making an IRA contribution.  That amount of money you put into the IRA or an HSA account is not included in your "adjusted gross income".  Assuming that you are in the 28% Federal tax bracket, and then add another 7% for the state taxes, you will save 35% on the money you put into an HSA account.  That means the government is paying about 1 out of every 3 dollars of your contribution for you.

• Self-employeed health benefits:  If you are a self-employed individual, your insurance premiums are deductible.  In addition, if you have an HSA plan, you can deduct your HSA contribution, too.  Because of these deductions, a self-employed individual can afford much richer health benefits.

• Aggregate deductible:  An important distinction needs to be made concerning how deductibles are computed for Qualified High-Deductible Health Plans.  The family deductible is an aggregate or combined deductible.  Each person’s covered medical expenses go toward meeting the family deductible.  Each insured person’s covered medical expenses go toward meeting this amount.  Once the family deductible is met, most plans will cover 100% of all allowable expenses for the entire family.  Therefore, any other covered expense you have done that year, will be paid for by the insurance company.  Compare this to a traditional copay plan where three of the insured persons EACH have their own deductible that must be met.  It is much more difficult to have each person meet their deductible than it is to meet an aggregate deductible. 

  Watch your Health Savings Account money accumulate:  First, let's assume that you make your HSA contribution.  As an individual, you can contribute $2,850 to your account, each year.  Any money that is not spent on qualified medical expenses each year remains in the account, so it can be invested to earn interest, or even be put into the stock market.  Any money that is left in your HSA account is not taxable until you remove the money. (If you take the money out before the age of 65 to spend on non-medical expenses, you will pay the taxes on the money plus a 10% penalty.)  Since you have never paid any taxes on the money you contributed to the HSA, and paid no taxes on any investment gains or interest gains, when you do take the money out,  after the age of 65, it will finally be taxed. HOWEVER, after the age of 65, if you use this money to pay for qualified medical expenses, you NEVER pay any taxes on the money.  Not a bad deal, eh?  It is also likely that when you are 65 or older that you will have more medical expenses, so it is quite likely you won't ever pay taxes on that money. 

  Here are two factors to consider:  First, you will probably have a lower tax rate at 65 years old than you have now.  Secondly, money that appreciates without the burden of income taxes grows at a much faster rate.  After the age of 65, you can withdraw the money to buy a sailboat if you’d like…no longer is there a restriction that you must spend this money for qualified medical expenses. You will finally pay taxes on the money, but it appreciated over the years tax free..

• You can use the HSA money for a wide variety of medical expenses including eye exams and glasses, doctors, dentists, braces, drugs, fertility enhancement, chiropractor, acupuncture, psychiatrist, psychologist, surgery, and long-term care insurance.  (Long-term Care insurance is the only insurance you can purchase with your HSA money. You cannot use your HSA savings money to pay your health insurance premiums.)  The list is extremely broad. 

• Here is the Qualified Medical Expense List.

You can start by getting quotes. 

Then, compare the different plans and ask questions. 

Next, apply online! 

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