To help resolve the problems caused by the fact that millions of Americans do not have health insurance, health savings accounts were established by the U.S. government in 2003. With these accounts, anyone with a job can make tax-free contributions to an account that will help offset medical expenses that come up. There are a couple of details that you have to take care of in order to create a health savings account. The process involves contacting a health insurance company and a bank or other financial institution.
Instructions
1. Sign up for a high-deductible health plan (HDHP) with a health insurance company like Cigna or Aetna. With an HDHP, you are required to pay a very high deductible before the insurance company pays out on your claim, usually more than $1,000. Your premium is much lower with an HDHP as compared to a regular health insurance program. Once you have an HDHP you are eligible for a health savings account.
2. Go to your local bank or insurance company and tell them that you want to open a health savings account. You can set up a direct deposit from your employee payroll, a bank account, or simply make manual deposits. Anyone can make deposits to your HSA on your behalf.
3. Deposit money into your health savings account regularly (up to the maximum allowed by law---see the Resource section below for the most current limits). The benefit of the HSA over a standard savings account is what is called "tax preferred." This means that you can make contributions to it before taxes are applied to your income through your employer. If you do not have an employer, you can deposit your after-tax money and then deduct the difference in a special section on your taxes that next year. You can also decide how the money in your health savings account will be invested. The HSA is meant to cover the high deductible cost in the case you do have to visit the doctor down the line.
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