Texas Health Savings Accounts

What is a Texas Health Savings Account or a High Deductible Health Plan?

Health Savings Accounts are tax-favored accounts set up to pay for certain medical expenses and to help you build savings to pay for future medical expenses. Accounts are set up with banks and certain other qualified financial institutions separate from the insurance company. Health Savings Accounts were created for individuals with a qualified high-deductible health care plan that pay lower monthly premiums compared to a traditional co-pay plans and would use the savings in monthly premiums to invest with the HSA.

You own this money just like an IRA or savings account. For certain medical, dental, and long-term care expenses, payments made from your established and funded account is not taxed or penalized. At age 65, you can withdraw this money penalty-free but subject to income tax. Withdrawals for non-eligible expenses before the age of 65 are subject to a 10% penalty and income tax.

What are the guidelines for 2017 Texas Health Savings Account?

The Internal Revenue Service (IRS) announced that the 2017 annual contributions limits for HSAs have slightly increased than the 2016 annual contribution limits.

Catch-Up Contributions

HSA owners age 55 and older can make additional contributions to their HSA called "catch-up contributions". For 2016 and 2017 the allowed catch-up contribution is $1,000.

Who is eligible in Texas to establish a Health Savings Account?

In order to open an HSA, individuals must meet be "HSA Eligible" IRS guidelines are clear that an HSA Eligible Individual is anyone who:

• Is under age 65 and not entitled to Medicare
• Is covered by an HSA-qualified, High Deductible Health Plan (HDHP)
• Cannot be claimed as a dependent by another person
• It's covered by some sort of additional, non-HDHP insurance program

What can I use the money that I have deposited into my account on?

You are able to use the money, tax-free, on what are called qualified medical expenses. So, what is that you might ask and what qualifies. Basically, not only does it cover things that may be included in health insurance plan, but also things that may not be covered like over the counter medications, dental and vision costs, lodging for medical care, medical equipment, mental health expenses and pregnancy and maternity costs.

One thing to remember is that even though you can use the money in your account for these expenses, not everything counts towards your deductible. At death, if a surviving spouse is the designated beneficiary of an HSA, it becomes a HSA for that widow or widower. If someone other than a surviving spouse is the designated beneficiary, the HSA is terminated as of the date of death and the fair market value becomes taxable income to that person. If there is no designated beneficiary, the remaining assets become part of the deceased's estate.

HSA Eligible Medical Expenses

What are the Health Savings Account Advantages and Disadvantages in Texas?

Advantages of Health Savings Accounts

• The money you deposit into a Health Savings Account (HSA) provides federal income tax deductions in Texas with no income limits.
• HSA withdrawals are tax free.
• Your HSA plan is portable and can be transferred to many other financial institutions or banks.
• If you have a family HSA plan, usually 1 deductible in required to meet your total family out of pocket exposure (instead of having separate deductibles for each person). If you compare this to a traditional health insurance plan, your savings could be more than 50% in total out of pocket expenses.
• HSA contributions stay in your account which rolls over annually, unlike a Flexible Spending Account, where you have to spend your funds at the end of each calendar year. Your account earns tax-free interest while your account is not in use.
• Premiums for HSA eligible health insurance policies are generally less expensive than traditional health insurance plans and you are able to participate within the Preferred Physicians Organization (PPO).
• You can withdraw money out of your HSA account for any reason after age 65 without penalty taxes.

Disadvantages of Health Savings Accounts

Allsure Insurance Strategies to supplement Texas Health Savings Account coverage

One of the main drawbacks people in Texas have for purchasing a Health Savings Account is due to initial out of pocket exposure (Deductible). Allure Insurance has access to supplemental companies that offer gap coverages such as accident insurance and critical illness. We feel that these coverages will hedge our clients from any catastrophic accidents or illnesses until they have enough funds in their Health Savings Account. So, if you live in Houston, Dallas-Ft. Worth, Austin, San Antonio, or any of our great Texas towns…Please feel free to call us. We would love an opportunity of helping you find the best HSA available.

CLICK HERE FOR TEXAS HEALTH SAVING ACCOUNT QUOTES