Tax Matters

Tax Matters

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HSAs Reduce Costs

The Medicare overhaul of December 8, 2003, created new Health Savings Accounts (HSAs). These new individual trust accounts replace and expand the former Medical Savings Accounts (MSAs) which were limited in scope and never achieved the broad participation the government was hoping for. Like IRAs (Individual Retirement Accounts), HSAs allow those with high deductible health insurance policies (that have much lower premiums) to:

HSAs are essentially another tax favored retirement savings account to set aside tax free funds for inevitable health care expenses now or in your retirement.

 

Ask your health insurance carrier or your employer about these new Health Savings Accounts.  These plans are a new attempt to lower health insurance costs and allow health costs to be user-driven.



What is a High Deductible Plan?

For 2004, the deductible must be at least $1,000 for self-only coverage and $2,000 for family coverage.  Maximum out-of-pocket expenses.


How Much Can You Contribute?

The Contribution limits for 2004 are the lesser of either the deductible amount of your plan or $2,600 for individuals and $5,150 for a family.

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