This article is about HSA’s which stand for Health Savings Account, which is a fairly new savings plan that came about late last year during the 2003 Medicare overhaul. After reading this article it became clear that this topic is very big and affects just about all middle and lower class working USA citizens. The new health plan combines low cost, high deductible insurance policies with a tax free savings account. In the article it states that since this new reform was put into place by our government, only a small hand full of companies throughout the U.S. offered this benefit within the same year. This was quoted by experts because most large firms allow revisions to there current health benefit plans every 3-5 years, while enrollment or reenrollment is only allowed annually. Because of those time frames, studies show that about 43% of American businesses will offer the savings account within the upcoming year, eventually increasing to 70-73% over the next 3-5 years.

This article explains in full detail the idea behind HSA’s. To me the idea is very simple “if consumers had to pay more of their health care expenses out of pocket, they would more than likely choose a much cheaper plan that fits their needs and not wants, forcing them to make a more informed decision. This in exchange would directly counteract the spiraling upward cost of health care, while still protecting the owners of HSA accounts against catastrophic medical problems. To qualify for the health savings account the insured must be under the age of 65 (thus nor eligible for Medicare), and must have a high deductible of $1000 for singles and $2000 for families. If your job offers such policies you should find that to have the lower premiums the deductible amount holds true, by allowing you or your employer to fund the HSA, with pretax dollars.

The maximum amount you can put in each year would be $2600 for singles and $5150 for families. The best part is if you have an IRA account the money in that account can be invested through your HSA administrator, making the compound interest earned tax-free unlike and earnings earned through flexible spending accounts. My opinion is partaking in this could be beneficial to people who don’t spend a lot on health care, the less you spend the more you keep. You also pay no taxes when you withdraw the money for health related reasons, and is your even if you loose your job and after you turn 65 the money is yours tax free.