Health Insurance Daily

Health Savings Accounts: The New 'Medical IRA'

Sick of costly health insurance premiums? Tired of HMO restrictions? Then maybe an "HSA" is for you.

A health savings account, or HSA, is like an individual retirement account for medical care. You can contribute up to $2,650 for an individual and $5,250 for a family, and that nest egg can be invested to earn additional income.

For many, one attraction is the favored tax treatment HSAs offer, although proponents say they can also help to contain the rising costs of medical care by encouraging consumers to spend their dollars wisely.

"The money is tax-free going in, it accumulates tax-free, and when it comes out, as long as it is spent on qualifying [medical] expenses, it comes out tax-free," said Tom Billet, a senior benefits consultant in the Stamford, Conn., office of Watson Wyatt Worldwide, a benefits consulting firm.

Plus, HSA participants can deduct the entire amount of their annual contribution from their federal income taxes.

Click on HealthDayNews for more information.

posted by Mike @ 2:57 PM