HSA's

Q) Rick, what's all this I'm hearing about HSA's? What is it?

A) HSA is the acronym for Health Savings Account. This concept is a part of the Medicare Modernization Act, known mostly as the new Part D of Medicare adding a prescription benefit.
A Health Savings Account works similar to an Individual Retirement Account (IRA) where $$ deposited into the account receive an above the line tax deduction. The money in the account earns interest tax free and is usable for Health Insurance expenses, or even health related expenses that might not be covered by the plan. Examples such as dental and vision. The money in this account is to be utilized to pay the deductible expenses of the plan. In order to qualify as an HSA plan, the minimum deductible allowed is $1000. No office visit copayments, or copayments for Rx is allowed. All medical expenses are out of pocket until the deductible is met, and at that time, the plan either pays 100% or 80% of expenses thereafter.