Want some HSA tips on how to save money? HSA stands for health savings accounts. These are government defined tax shelters used to generate tax free income for spending on qualified health care expenditures.
An HSA is a bank account. It is, as the name implies, a savings account. HSAs come with government defined contribution limits. You contribute tax free dollars in and you get to spend it tax free as well. Depending on your tax rates, this could mean savings of up to forty percent or more on your actual medical expenses.
In order to contribute money to an HSA, your health insurance plan must be a qualified high deducitble plan. So what are the 2010 high deductible minimum and maximum deductible insurance limits and what are the 2010 HSA contribution limits?
| Minimum Deductible | Maximum out-of-pocket | HSA Contribution Limit | 55+ Contribution | |
| SINGLE | $1,200 | $5,950 | $3,050 | $4,050 |
| FAMILY | $2,400 | $11,900 | $6,150 | $7150 |
There are no changes for the 2011 limits in high deductible qualifying minimums or in the HSA contribution limits.
What you'll notice is that the minimum deductibles for the high deductible plans are far below the maximum contribution limits to the HSA account. That means, it's possible for a family to have a a total out of pocket (not including the actual health insurance premiums) of only $2,400 in 2010 while contributing $6,150 of income tax free into their savings account in 2010. The same holds true for 2011.
That means, assuming they spend their total deductible of $4,800 over two years, they could still contribute $12,300 in tax free income. Which means after two years, they could have $7,500 built up in a medical savings acount for future expenses (such as Medicare premiums) or non deductible qualified medical expenses (such as fertility treatments).
What do all these deductibles and limits mean to you? Well, I learned first hand how some folks use the timing of their deductibles to their advantage. Most insurance plans reset their deductible limits on a certain date every year. I had a cancer patient who recently delayed a round of chemotherapy by two weeks so their chemotherapy charges on their $4000 out of pocket deductibles would apply to the following calendar year. I call this deductible stacking. It is a natural extension of FREE=MORE.
I have a high deductible HSA. If I expected a large medical expense one year and much less the next, you bet I would push forward or delay a therapy to take advantage of deductible stacking. It should be part of any family's money saving strategy for navigating the crazy world of HSAs and high deductible health insurance plans.
