An Illinois Health Savings Account (HSA) can be a great way to provide you with the opportunity to control your health care costs while enjoying some significant tax advantages. As an Illinois license health insurance brokerage, Health Insurance Services, Inc. is here to help you better understand your health insurance options.
If you’re unsure as to how an HSA works or how it will fit with your particular health care needs, take the time to learn a little about the benefits and make an informed decision. Besides, understanding your health care options can only work in your favor, giving you more information and knowledge when it comes time to purchase health care coverage.
What is a Health Savings Account?
The easiest way to understand a health savings account is to think of it like a personal savings account where the money can only be used for health care related expenses. Basically, an HSA is a tax exempt trust that is set up to pay for or reimburse medical expenses that you incur. Health savings accounts were created in 2003 for people who were covered by high deductible health plans. The goal was and still is to give them tax advantages to offset medical expenses.
A health savings account has some great benefits. Not only can you save money on health care, but also, you have more choice and control in how you choose to spend your health care dollars. Plus, let’s not forget the tax advantages.
You’re allowed to claim a tax deduction for contributions you make to your Health Savings Account and any contribution your employer makes can be excluded from your income for purposes of filing taxes. You can even invest the money in stocks, bonds etc. Interest on the earnings is tax free and funds roll over from year to year. Additionally, you’ll never lose your health savings account because it belongs to you. So if you move out of state or change jobs or even lose your job, your account is secure.
How Does it Work?
In Illinois, you pay out-of-pocket for all your medical expenses until your deductible is met. After you meet your deductible, your insurance company pays 100% of all covered expenses for the rest of the year. In many cases, your maximum out-of-pocket expenses will be equal to your deductible.
In order to qualify for an Illinois Heath Savings Account, you must be under age 65 and enrolled in a high deductible health plan with no other health care coverage. Generally, if you have dental, vision, disability or long term care insurance, you can still qualify for an HSA. However, the high deductible plan must be your only health insurance coverage and if your spouse uses your insurance, he or she must be enrolled in a high deductible plan as well.
You can purchase an Illinois Health Savings Account from most private insurance companies in the state. However, consider well known, large insurance providers like Blue Cross Blue Shield of Illinois because they have working relationships with health care providers and can negotiate better terms on your behalf.
A health savings account, when paired with the right health care plan from Blue Cross Blue Shield of Illinois can give you more control and choices in health care. In addition to lower monthly premiums and comprehensive medical coverage, you can enjoy tax advantages offered through your Illinois Health Savings Account.