Here are a couple little known tips that could significantly reduce your taxes for 2012:
1. If you are a small business owner with less than 25 full-time employees and you are paying health insurance premiums for your employees, you could be eligible for a TAX CREDIT of up to 35% of the employer portion of premiums paid in 2012.
2. If you were covered by an HSA qualified High Deductible Health Plan (HDHP) on or before December 1st, 2012 then you have until you file your taxes (or April 15th 2013) to contribute to your HSA and get a 2012 tax deduction.
2012 Contribution limits:
Single – $3100
Family – $6250
Catch up contribution (age 55 or older) $1000 per person*
2013 Contribution limits:
Single – $3250
Family – $6450
Catch up contribution (age 55 or older) $1000 per person*
*If both are 55+ then both have to open HSA accounts for both to participate in catch up contribution
These limits are also stated on the U.S. Department of Treasury website.
These maximum contributions will not be pro-rated if your HSA qualified health insurance plan (HDHP) was either in force all 12 months of 2012 OR if it was in force by December 1st of 2012 AND remains in force all 2013.
Your tax deduction is based on how much you DEPOSIT into your HSA, not how much you spend.
You do not have to itemize to get the tax deduction.
You do NOT have to pay your eligible expenses out of your HSA.
You are required to keep receipts of your eligible expenses in case the IRS audits you. You can choose to reimburse yourself at a later date up to the medical receipts you have accumulated without being subject to 20% penalty or taxable income.
The triple-tax advantages (tax deductible deposits, tax free interest earned, and tax free withdraws for eligible medical expenses) only available with HSAs make them an important tax planning tool that is unmatched when used properly.
Other statistics show that nearly half of the 14 million Americans covered by the required HDHP insurance plans have not established their HSA account, and therefore are not participating in the tax savings they offer. Although OFM Benefits is one of the nation’s premier HSA focused insurance agencies, there are probably some of you that have procrastinated setting up your account.
As many Americans are facing huge health insurance premium increases and revenue decreases, HSA qualified plans are becoming even more popular. The average household pays nearly $16,000 per year for health insurance premiums! We feel HSA qualified plans offer the best value in healthcare today.
If you are self employed or a business owner and would like to receive the premium savings and tax deductions only available with HSAs, please visit www.missionHSA.com
N. Scott Borden
Dave Ramsey’s Endorsed Local Provider (ELP)
Health Insurance Director
OFM Benefits Consulting, LLC
6400 Glenwood, Suite 307
Overland Park, KS 66202
913-980-4694 mobile
913-432-2061 fax
http://www.missionHSA.com
What’s the number one problem facing small businesses today?
Hint… it’s been the same number one for the past 25 years.
Health Insurance remains #1
HSA qualified health insurance plans are the fastest growing segment in healthcare today because they save money on health insurance and taxes.
Here is a short video explaining the basics of HSAs as heard on “Insurance Talk with Scott & Mike” November 10, 2012.
(Updated 2013 post-election)
The Patient Protection and Affordable Care Act (PPACA, ObamaCare) has been ruled constitutional. And Obama has been re-elected so there is no chance of repeal. What does all this mean for Health Savings Accounts?
HSA qualified High Deductible Health Plans (HDHP) are the fastest growing segment in health insurance today. Over 15 million people have over $17 billion saved in their HSAs. Since unspent HSA funds roll over from year to year, HSA owners have a vested interest in not spending their own healthcare dollars. The more common co-pay plans insulate people from costs which often results in over-utilization. HSAs change this behavior. This is why they are commonly referred as ‘Consumer Driven Healthcare’ plans.
There are some portions of the law that directly affect HSAs. There are several other rules that we have to speculate how they will be implemented. Let’s begin with the direct HSA rulings:
1. The penalty for ineligible withdrawals from an HSA has been increased from 10% to 20%
2. All over-the-counter medications now require a written prescription
That’s it. As long as you keep proper records verifying your HSA withdrawals were for eligible medical expenses (see publication 502) and obtain a written prescription for your allergy medication, pain relievers, etc. then you will not be subject to any penalty at all.
Now for the provisions that will impact HSAs indirectly:
1. INDIVIDUAL MANDATE (2014)
Since ObamaCare requires people to purchase health insurance, most people who are currently uninsured will look for the lowest cost option available. HSA qualified insurance policies are not allowed to have co-pays and have minimum deductibles of $1250 for self-only coverage and $2500 for families which makes them more affordable. This could dramatically increase how many HSA qualified plans are purchased.
2. STATE EXCHANGES (2014)
Exchanges are online portals where people can enroll in health insurance plans and potentially receive government subsidies based on income (up to 400% poverty level). Since HHS Secretary Kathleen Sebelius continues to interpret how these exchanges are to be implemented, this one is far from finalized. Companies will be allowed to offer up to 4 plans on the exchanges (bronze, silver, gold, platinum) each with mandated “Essential Health Benefits”. All exchange qualified small group plans have a maximum deductible of $2,000 for self-only coverage and $4,000 for families. This type of a restriction will increase the cost of HSA qualified health insurance plans over the larger deductibles available today (up to $6,050 for self-only coverage and up to $12,100 for families). But they should still offer a substantial premium savings over co-pay plans.
3. MEDICAL LOSS RATIO (2011)
ObamaCare requires Health insurance companies to pay at least 80% of all collected individual / small group premiums and at least 85% of all large group premiums out in benefits and claims. HSA qualified insurance plans typically cost less while still having similar fixed costs (insurance company marketing, underwriting, and claims processing) which makes MLR a difficult provision for them to comply with. This could limit the number of insurance companies that offer HSA qualified plans on the exchanges. However the elimination of underwriting costs (all plans will be guaranteed issue) and the reduction in marketing costs for the insurance companies once most insurance agents are replaced by exchanges should make all plans MLR friendly by 2014.
Unless Kathleen Sebelius makes an unexpected ruling, HSAs appear to not only survive ObamaCare, but potentially thrive.
So… Health Savings Accounts appear to have a bright future with or without ObamaCare.
Original pre-election version as published in Ingram’s Magazine September 2012
By the HSA GUY, Scott Borden
Host of “Insurance Talk with Scott & Mike” Saturday 7-8 AM on www.KCMOtalkradio.com
www.missionHSA.com
913-980-4694
Regardless of how SCOTUS arrived at its decision, ObamaCare (Patient Protection & Affordable Care Act) is now the law of the land.
I was interviewed this morning on The KCMO Morning Show with Greg Knapp. He asked me what ObamaCare will do to our current insurance plans:
Click HERE to listen to the interview
Greg Knapp and Scott Borden
We discussed several of the mandates that will raise health insurance premiums such as guaranteed issue and the rarely mentioned time bomb known as the 3:1 Ratio. If only young people understood how ObamaCare will significantly increase their health insurance premiums, maybe they won’t be as eager to support Obama like 68% of them did in ’08.
There is still a chance to overturn the largest tax increase and re-distribution legislation in the history of our country. Your chance will come November 6th.
Democrats vote November 7th.
(UPDATE: Read ObamaCare vs. Health Savings Accounts article published in Ingram’s Magazine September, 2012)
So you finally switched to an HSA qualified High Deductible Health Plan (HDHP). You love the lower health insurance premiums these plans offer. However, life happened and you didn’t get around to setting up your Health Savings Account (HSA). Now you are sitting there with a medical bill you need to pay, and you remember the triple tax advantaged HSA account that allows you to pay for HSA qualified eligible medical expenses with tax deductible money.
Unfortunately the HSA account needed to be established BEFORE the expense was incurred to be an HSA eligible expense.
For all you procrastinators out there, here’s my advice… take 5 minutes and set up your HSA with HSA Bank. They have no setup fees and offer very competitive interest rates along with thousands of investment options.
HSA Bank Home Office
HSA Bank was one of the very first financial institutions that recognized the importance of Consumer Driven Health Plans. They opened their first Medical Savings Account in 1997. They currently have nearly 400,000 HSA accounts holding over $1 billion in HSA deposits.
Nobody knows for sure how many people are eligible to set up an HSA and have yet to do so. It only takes a few minutes and it could save you a lot of money on your next tax return.
We had the privilege of interviewing several HSA Bank executives recently on Insurance Talk.
September 3, 2011 Dean Mason, CEO
September 10, 2011 Phil Hartsig, Regional Vice President
September 17, 2011 Itamar Romanini, Senior Vice President of Business Development
December
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