Since first being signed into law in December 2003 by the Federal Government, Health Savings Accounts are already a proven "hit" & are here to stay. They are literally available to every legal adult in the United States.

Knowledge is power when it comes to your finances. Medical Insurance has now become the newest form of an investment vehicle offering tremendous financial & tax benefits. Today, opening a Health Savings Account in partnership with an HSA qualified health insurance plan offers many special financial advantages. And for the most part, they are simple to understand.

A Health Savings Account enables you to:

-- Maintain access to a wide PPO network and in most cases provides coverage for seeing your current doctors and specialists.

-- Lower your health insurance premium by 25% - 50%. One can typically save between 80 to 250 dollars per month when they change their plan over from a traditional health insurance plan to a HSA qualified high deductible health plan. Now don't be deceived. Yes, you'll now have a high deductible, but there are plenty of safety nets to protect you if necessary. The first step to take is to place monies saved from your new lower premium into your Health Savings Account. This doesn't cost you anymore than what you were paying before...you are just putting the money in a new place.

Next, enjoy IRS created HSA triple tax advantages (see the "a-b-c" listed below). Reduce your annual out-of-pocket income taxes up to $2000. Save EVERY year on taxes from here on out. Below are your three main tax saving pillars.

a) Contributions to your HSA are 100% tax free

b) Interest on all of your account investment gains are also 100% tax free. The type of investments are your choice and range from low-interest, no risk, lower bank rates to the widest range of stocks, bonds, & mutual funds. The level of risk is up to you.

c) Make 100% tax-free withdrawals from your HSA for any qualified medical expense.

As you money grows tax free, you are now building a significant retirement account of up to several hundred thousand dollars. If you must use the money to cover any part of your deductible, withdraw and use tax free money. All of these factors diminish the impact of having a higher deductible plan. There will be many months and even entire years where the money just grows and is never withdrawn because you have no medical expenses.

Here is another benefit. The Internal Revenue Service (IRS) rule says that at age 65 the money from your Health Savings Account can be withdrawn penalty-free for any reason, not just for qualified medical expenses. At that time you'll pay regular income tax if the money is used for non medical expenses (just like an IRA). However, your income during in retirement generally goes way down and so do the taxes you'll pay. Also, you hopefully had many years of tax free growth.

Finally, understand that the funds in your HSA are always yours, without exception, and they rollover from year to year. You can even do a one time rollover from an IRA into an HSA without penalty (if you choose).

And yes ... you may continue contributing to your IRA every year while still making the full allowable contributions to your Health Savings Account. Having both is the ultimate, but if you can only afford one...I would go with an HSA.

The raw truth is that many people are still very unclear about HSAs and what they really accomplish. Too often, an individual or business's insurance broker has not kept them properly up-to-date on all the benefits available to them. Why should they? They may lose some commission if they end up saving you money (which they will). An agent however is obligated, by a legal fiduciary duty to serve his or her client's best interest at all times. This duty is often not being respected nor is it typically enforced by the Department of Insurance. Furthermore, although insurance companies are legally obligated to offer HSA health insurance plans in their product lines, they don't go out of their way to promote & publicize them as they should. Doing so would lower THEIR profits. In summary, as a consumer you really must take matters into your own hands and become informed.

The expert advisers at HSA-Health-Savings.com. are on a mission because millions of folks and their families are missing out on the tremendous financial benefits that are so readily attainable RIGHT NOW. We are excited! The benefits of HSA Plans can literally transform lifestyles immediately, and as people grow into their retirement years. Regardless of your income level, if you pay for health insurance you owe it to yourself to consider and compare the benefits of an HSA health insurance plan versus a traditional plan.

Written by Andrew W. Devore
Andrew W. Devore is a licensed insurance broker and adviser at HSA-Health-Savings.com.

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