The availability of health insurance and its associated costs have been the topic of debate for years. The United States Government has tried to intervene to make health insurance more affordable, more accessible and more accommodating. These efforts, while gallant, still leave many in the cracks without any health insurance coverage.
If one is fortunate enough to work for an employer who provides the option of health insuranceand the employee can afford to pay for it, this is an ideal situation. However, for those who are unemployed, or who work for an employer who is unable to offer health insurance a solution must be found.
Preferred Provider Organizations(PPO’s) allow the employee to enroll within a “preferred” network of providers and hospitals. When this network of providers is used, the healthcare providers have agreed to a negotiated rate, therefore saving the employee on overall expenses. Each provider must meet and maintain strict quality requirements although they are providing their services at a “discount”.
Medical Savings Accounts (MSA’s) were established and, like an IRA- like banking account, were used to pay for medical care. Eligible out-of-pocket medical expenses such as office visits and hospital care can be paid for through a tax free medical “savings” account that the employee contributes to from an automatic withholding from their wages. An MSA “banking” approach allows the employee to contribute wages, tax free, to their MSA and use it for medical expenses incurred during the year.
Flexible Account Insurance:
Everyone has heard a lot about flexible spending accounts, or FSA’s. These allow you to save on your taxes much like the MSA’s, but while paying for certain medical bills or day care expenses not covered under the employee’s medical insurance plan. One may choose to enroll in the Health Care Spending Account, the Day Care Spending Account or both.
In this plan, the employee chooses an amount to be deducted from each pay check and placed into a special account. The payroll deduction is taken from the employee’s pay before federal and state income taxesare calculated and deducted, which means the employee actually reduced the amount of taxes paid. Most times, one can contribute up to $3,000 each year.
Health insuranceSavings Accounts (HAS’s) were established by President Bush in 2003 and designed to create competition in the marketplace There’s two components to a health insurancesavings account; one is low-cost catastrophic insurancecoverage, and a tax-free health insurance savings account.
Similar to the other plans, other words, your company, or yourself, or a combination of the two makes a tax-free contribution into ahealth savings plan, but, there is a difference, a BIG difference. An HSA is a savings plan that you own. It means that if you don’t spend money in your savings account on health care, you can roll it over to the next year, tax-free.
You have money growing for health care to pay incidental expenses; it’s growing at a reasonable interest rate; it’s yours you call your own, and if you don’t spend it in a year you can put it into the next year, and the next year, and the next year. Over the last 10 months, the number of HSAs has tripled. In other words, people are becoming aware.
While there are many advantages to each scenario, there are also limitations of health Insurance. The IRS has guidelines on which expenses are allowable and disallowable under MSA’s and FSA’s. One can not stop or change the deposits to the accounts until the next enrollment period. Requests for reimbursement may take an exceptionally long period of time. Also, it not permissible to transfer funds from one account to the other.
Information About Insurance:
If you are tired of sending hundreds and hundreds of dollars each month to your health insurance company and would prefer to keep a big chunk of that money for yourself to spend on health expenses or save it for the future, then shop around and investigate the information about further.