An HSA can save you money.
If you get your health insurance through your employer, you are somewhat shielded from the true cost of that coverage. That is because most employers pay the majority of the cost of health insurance for their workers. But when you strike out on your own, you need to pick up the entire cost of coverage, and that coverage can cost hundreds of dollars a month. There is a way for self-employed individuals and business owners to save money. By using a high-deductible health insurance plan and a health savings account, those business owners and individuals can save thousands of dollars a year.
Instructions
1. Contact several health insurance brokers in your area. The National Association of Health Underwriters is a good resource to start.
2. Tell the broker you speak to that you want to purchase a high-deductible health insurance plan. As the name implies, these plans come with a high deductible, typically in excess of $3,000. The advantage is that these plans also tend to have much lower premiums, so the savings can more than make up for the higher deductible.
3. Look for a plan that pays 100% of covered costs after the deductible has been satisfied. The purpose of these plans is to provide catastrophic coverage, so you need to make sure the plan will pay all of the covered costs in the event of a serious illness or accident.
4. Contact your local bank about opening a health savings account. Health savings accounts are special accounts that are used to pay for out-of-pocket health costs. When coupled with a high deductible savings account, an HSA can be a useful savings vehicle. By taking the money you save on your monthly premium and directing it to the HSA, you can self-finance your deductible and save a lot of money.
5. Examine how the opening of a health savings account can affect your tax bill. Use your tax preparation software to run the numbers on your tax return, both with and without the health savings account. The deduction for the health savings account can save you a great deal of money, over and above what you save on your monthly premiums.
Tags: savings account, health savings account, health insurance, health savings, these plans, business owners
