A healthcare savings account ( HSA ) is a tax-advantaged medical saving account available to taxpayers in the United States who are enrolled in a deductible health plan (HDHP). The funds contributed to the account are not subject to federal income tax at the time of deposit. Unlike flexible spending accounts (FSAs), HSA funds shift and accumulate year by year if they are not spent. HSAs are owned by individuals, which distinguishes them from the HRA's Corporate Health Adjustment (HRA), which is a source of alternative tax deduction funds coupled with a reduced health plan or standard health plan.
The current HSA Fund can be used to pay for quality medical expenses at any time with no federal or penalty tax liability. Starting early 2011 free medicines can not be paid with HSA without a prescription. Withdrawals for non-medical costs are treated very similar to those in individual retirement accounts (IRAs) because they can provide tax benefits if taken after retirement age, and they are penalized if taken earlier. These accounts are a consumer-driven health care component.
HSAs supporters believe they are important reforms that will help reduce the growth of health care costs and improve the efficiency of health care systems. According to advocates, HSAs encourage savings for future health care costs, allowing patients to receive required care without a goalkeeper to determine what benefits are allowed, and make consumers more accountable for their own health care options through the Higher Health Plan required.
Opponents of the HSAs say they can worsen, not increase, health care in the United States because people can withhold health care expenses to be borne, or perhaps spend it unnecessarily just because it has accumulated to avoid punishment taxes for withdrawing, but those who have a health problem that has a predictable annual cost will avoid the HSA to have the costs paid by the insurer. There is also a debate about consumer satisfaction with this plan.
Video Health savings account
History
The HSA was established as part of the Medicare Prescription Drug, Improvement and Modernization Act, which included the enactment of Internal Revenue Code article 223, signed by President George W. Bush on December 8, 2003. They were developed to replace the medical savings account system.
A survey of entrepreneurs published by the Kaiser Family Foundation in September 2008 found that 8% of protected workers were listed in consumer-driven health plans (including HSAs and Health Reimbursement Accounts), up from 4% in 2006. The study found that about 10% of companies offer the plan to their workers. Large companies are more likely to offer plans with high deductions (18%), but higher registration in small firms (8% are covered, compared to 4% in large firms). By 2012, these numbers have increased. About 31% of companies offering health insurance offer HSA options (26%) or HRA (5%). Large companies (38%) are somewhat more likely than small firms (31%) to offer the option. 11% of protected workers are in HSAs, while 8% are in HRA. In small companies, 24% in health plans can be reduced vs. 17% in big companies.
A health insurance survey undertaken by the American Health Insurance Plan (AHIP) found that 4.5 million Americans were covered by HSA's eligible health plan as of January 2007. Of these, 3.4 million were covered through a company-sponsored plan, and 1.1 million closed by purchasing individually eligible HSA packages. This represents an increase of 1.3 million since January 2006. In individual markets, 25% of new buyers buy HSA qualified packages. HSA's eligible packages represent 17% of new policies sold on the small group market and 8% of new policies sold in large group markets. A follow-up survey by AHIP reported that the number of Americans covered by the eligible HSA plan has grown to 6.1 million in January 2008 (4.6 million through a company-sponsored plan and 1.5 million is covered by eligible HSA plans purchased individually). Eligible HSA packages represent 27% of new purchases on individual markets, 31% of new registrations in small group markets and 6% of new registrations in major group markets.
In January 2008, the Celent market research firm moderated earlier projections, calling the HSA market "disappointing early shows," and projecting 12.5 million accounts in 2012. A survey published by AHIP in May 2009 found that 8 million people were covered by HSA/High. - Health plans that can be unveiled in January 2009. Among them, 1.8 million are covered by individual policies and about 6.2 million are covered by group plans.
The Government Accountability Office (GAO) reported in April 2008 that many individuals enrolled in the HSA's eligible health plan did not open a health savings account that met the tax requirements, and individuals who had health savings accounts had higher incomes than others. According to the report, a national representative survey conducted by the Blue Cross Blue Shield Association in 2005 to 2007 found that 42-49% of eligible HSA plan registrants did not open health savings accounts in those years. Based on Internal Revenue Service (IRS) data checks, GAO found that tax reporters who report health savings account activity have higher average incomes than other tax reporters. Contributions to health savings accounts ($ 754 million in 2005) were approximately two withdrawals from accounts ($ 366 million). The average contribution is also about twice the average withdrawal ($ 2,100 versus $ 1,000). 41% of tax reporters who contribute to a health savings account do not withdraw; 22% resigned more than they contributed during the year.
Data released in 2012 shows that the use of health savings accounts is increasing. AHIP reported in May 2012 that the number of people covered by eligible HSA qualified health plans more than doubled between January 2008 and January 2012 (up from 6.1 million to 13.5 million). The split between groups and individual plans is 11 million compared to 2.5 million, and gender distribution of health savings accounts between male and female registries is even 50%. Among individual plan holders, 51% were under 40, and 49% were over 40 years old. The top five states with high deductible health/health registration registration programs are California (1 million), Texas (0.76 million), Illinois (0.72 million), Ohio (0.66 million), and Florida ( 0.54 million). Also, a survey released in February 2012 by J. P. Morgan Chase of his 900,000 health savings accounts shows that contributions to health-savings accounts continue to increase. Between 2009 and 2011, Chase's average healthcare savings account rose 11% annually, and the average employee contribution increased by 7% in 2011. Also, in 2011, 42% more dollars were transferred from health savings accounts to the health savings account of the investment account from being transferred out. It is believed that the Affordable Care Act, which requires all employers with 50 or more employees to offer health insurance, can encourage this growth. Higher deductible health plan premiums tend to be lower, and make attractive choices for employers and employees. Since health savings account holders are required to be covered by a reduced health plan, this creates opportunities for greater growth in the health savings account space.
According to a 2017 study conducted by Devenir, approximately $ 45.2 billion was held in over 22 million health savings accounts.
Maps Health savings account
Operation
Deposit
Deposits to health savings accounts may be made by policyholders of eligible HSA qualified health plans, by employers, or others. If the employer makes deposits for the plan on behalf of its employees, all employees should be treated equally, known as non-discriminatory rules. If the contribution is made to the Section 125 plan, non-discrimination rules shall not apply. Employers may treat part-time and part-time employees differently, and employers may treat individual participants and families differently; the treatment of unregistered employees in eligible HSA qualified packages is not considered for non-discriminatory purposes. In 2007, companies could contribute more to employees who are not highly compensated than highly compensated employees.
Contributions of employers or employees may be made on a pre-tax basis by the employer. If the option is not available through an employer, contributions may be made on a post-tax basis and then used to reduce gross taxable income on Form 1040 of the following year. The company's pre-tax contribution is not taxed by the Federal Insurance Contributions Act or Medicare tax, but the employee's pre-tax contribution not made under the cafeteria plan is subject to FICA and Medicare taxes. Regardless of the method or tax savings associated with the deposit, the deposit can only be made for persons covered in eligible HSA-eligible packages, without any other coverage beyond the scope of qualified supplemental coverage.
Initially, the annual maximum deposit to a health savings account is lower than the reduced or specific Internal Revenue Service limit. Congress subsequently abolishes limits based on legal limits that can be subtracted and set for maximum contribution. All contributions to a health savings account, regardless of source, are calculated up to the annual maximum.
The catch-up provision also applies to plan participants 55 and older, enabling the IRS limit to be increased. For 2018, the contribution limit is $ 3,450 for singles or $ 6,850 for married couples and families, plus $ 1,000 "overtaking" for those over 55. For 2019, the contribution limit is $ 3,500 for singles or $ 7,000 for married couples and families, plus $ 1,000 "chasing" for those over the age of 55.
All deposits to a health savings account belong to the policyholder, regardless of deposit source. Funds saved but not withdrawn each year will be carried over to the following year. Policyholders who terminate their HSA qualified insurance coverage lose eligibility to deposit further funds, but existing funds in health savings accounts remain available for use.
The 2006 Tax and Health Care Assistance Act, signed into law on December 20, 2006, adds a provision allowing a taxpayer, once in a lifetime, to transfer IRA assets to a health savings account, to finance up to a maximum contribution of one year to a health savings account.
The treatment of state income tax from health savings accounts varies. Alabama, California, and New Jersey do not allow the state income tax exemption for contributions to health savings account contributions. Wisconsin does not allow the state income tax exemption for contributions to health savings accounts before 2011.
Contribute limitations
A taxpayer in general can contribute to a health savings account for a taxable year until the deadline to file an individual income tax return for that year, which is usually April 15. All contributions to a health savings account from both employers and employees count towards the annual maximum.
Investment
Funds in health-savings accounts can be invested in a similar way to investments in Individual Retirement Accounts (IRAs). Investment income is protected from taxation until money is withdrawn and can be saved even later, as discussed in the section below.
Investments in health savings accounts can be directed by individuals. While a typical health savings account saver can offer investments such as certificates of deposit, stocks, bonds, or mutual funds, certain financial institutions provide accounts that offer alternative investments that can be made in health savings accounts. The Internal Revenue Code Section 408 prohibits health savings accounts to invest in collectibles and life insurance policies, but health savings accounts can have investments in real estate, precious metals, public and private stocks, records, and more.
Although health savings accounts may be transferred from funds to funds, health savings accounts can not be transferred to Individual Retirement Accounts or 401 (k) pension plans, and funds from such investment vehicles may not be deposited into health savings accounts, except for a single transfer of the Pension Account Individuals mentioned earlier. Unlike some employer contributions to the 401 (k) retirement plan, all contribute to the participant's health savings account immediately, regardless of the source of the deposit. Someone contributing to a healthcare account is not obliged to contribute to a company-sponsored healthcare savings account, but the employer may require payroll contributions made only to a company-sponsored health savings account plan.
Withdrawal
Participants of a health savings account should not get prior approval from the trustee of their health savings account or their medical insurance firm to withdraw funds, and their funds are not subject to income tax if they are made for eligible medical expenses. They include fees for services and items covered by the health plan but are subject to cost sharing such as deductions and coinsurance, or collective payments as well as many other costs not covered by the medical plan, such as dental care, vision and chiropractic; durable medical equipment such as eyeglasses and hearing aids; and transportation costs associated with medical care. As of December 31, 2010, over-the-counter, non-prescription pharmaceuticals are also eligible, after which, Patient Protection and Affordable Care Act specify that HSA funds can no longer be used to buy over-the-counter medicines without a prescription.
There are several ways that funds in health savings accounts can be withdrawn. Some health savings accounts include debit cards, some inventory checks for account holder use, and some allow for similar reimbursement processes with health insurance. Most health savings accounts have more than one possible method for withdrawal, and the available methods vary. Checks and debits do not have to be paid to the provider. Funds may be withdrawn for any reason, but withdrawals that are not for documented medical expenses must be subject to income tax and a 20% penalty. 20% penalty is waived for persons who have reached the age of 65 years or have become disabled at the time of withdrawal. Then, only the income tax paid on withdrawal and in effect, the account has increased deferred tax. Medical expenses continue to be tax free. Prior to January 1, 2011, when new regulations governing health savings accounts in Patient Protection and the Affordable Care Act came into force, the penalty for withdrawals that were not eligible was 10%.
Account holders are required to keep documentation for their quality medical expenses. Failure to retain and provide documentation may cause the IRS to decide that the withdrawal is not for eligible medical fees and subject to taxpayers for additional penalties.
There is no time limit for reimbursement of eligible medical care costs incurred after a health savings account is established. Participants of health savings accounts can take advantage by paying medical fees from their pockets and storing receipts but allowing their accounts to grow tax-free. The money can then be withdrawn several years later for any reason until the value of the receipt.
When someone dies, the funds in their health savings account are transferred to the named recipient for the account. If the recipient is a surviving spouse, the transfer is tax free. If the heir is not a spouse, the account ceases to be a health savings account, and fair market value of a health savings account (minus eligible unpaid medical costs of the deceased paid in the 1st anniversary of his death) becomes taxable for the recipient at the year in which the savings account owner died. There is no stretching provision for non-partner beneficiaries unlike for Individual Retirement Account and 401 (k) pension plans: when a non-spousial beneficiary, the person pays income tax on the entire amount of the year, without stretching.
Compared to medical savings account
The health-savings account is similar to a medical savings account (MSA) endorsed by the federal government before a health savings account plan. health savings accounts can be used with some high deductible health plans. the health savings account came after the law was signed by President George W. Bush on December 8, 2003. The law came into force on 1 January 2004.
The health-savings account differs in some way from a medical savings account. Perhaps the most significant difference is that employers of all sizes can offer health savings account accounts and insurance plans to employees; Medical savings accounts are limited to entrepreneurs and entrepreneurs with 50 or fewer employees.
Benefits
Premiums for a high deductible health plan are generally less than the premium for traditional health insurance. Higher reductions lower premiums because insurance companies are no longer paying for routine health care, and insurers believe that Americans who see a connection between their medical and bank accounts will consume less medical care, shop for lower-cost options, and more again wary of the advantages and frauds in the health care industry. Introducing consumer-controlled supply and demand and controlling inflation in health care and health insurance is one of the government's goals in setting this plan.
With a health savings account, in a disaster situation, the legal obligation of maximum allowable out-of-pocket expenses can be less than traditional health plans. That's because a high-quality, deductible health plan can cover 100% after deductible, not involving coinsurance.
Health savings accounts also provide flexibility not available in some traditional health plans to pay based on pretax for eligible medical costs not covered by standard or HSA qualified insurance plans, which may include dental, orthodontic, vision, and other expenditures Approved.
Health savings accounts also have advantages over flexible expense accounts because deposits are not always tied to expenses in a particular plan or calendar year. They are automatically renewed for future medical expenses or can be used to reimburse eligible costs from previous years as long as the fee is eligible under the health savings account plan at the time the fee is issued.
Over time, if medical costs are low and contributions are made regularly to health savings accounts, accounts can accumulate significant assets that can be used for tax-free health care or are used for retirement on a tax-deferred basis.
Higher deductible health plans, when combined with health savings accounts, are the only option available health insurance plans that may earn a net value during the year if the funds are invested in a health savings account.
A recent industry survey found that in July 2007, over 80% of health savings account plans provide the first dollar coverage for preventive care. That's really almost all the health savings account plans offered by large corporations and over 95% of the plans offered by small companies. That also applies to 59% of the plans purchased by individuals.
All plans offer preventive care benefits in the first dollar including annual physical examination, immunization, infant and child care, mammograms, and Pap tests; 90% including prostate cancer screening, and 80% including colon cancer screening.
They actually encourage customers from all backgrounds to limit their expensive spending and receive more preventive health care. In Indiana, those with a health savings account are 98% satisfied.
Criticism
Some consumer organizations, such as the Consumer Union, and many medical organizations, such as the American Public Health Association, oppose health savings accounts because, in their opinion, they only benefit healthy people, younger ones, and make health care systems more expensive for everyone. other. According to Stanford economist, Victor Fuchs, "The main effect of putting more on consumers is to reduce the element of social insurance redistribution."
Critics argue that low-income people, who are less likely to be insured, do not get enough to benefit from the tax breaks offered by health-savings accounts. This tax break is too simple, compared to the actual cost of insurance, to persuade large numbers of people to buy this coverage.
One industry study matches health savings account holders with environmental earnings ("environments" defined as their census channels from Census 2000) and found that 3% of holders of accounts live in "low-income" environments (median earnings below $ 25,000 in 1999 dollars ), 46% live in lower middle income environments (average income between $ 25,000 and $ 50,000), 34% live in middle-income environments (average income between $ 50,000 and $ 75,000), 12% live in income environments high (average revenue between $ 75,000 and $ 100,000) and 5% living in high-income neighborhoods (average revenues above $ 100,000).
In testimony before the US Senate Committee on Health Committee Finance Committee on Health in 2006, the Commonwealth Fund advocacy group said that all evidence to date suggests that health-savings accounts and high-deductible health plans exacerbate, rather than improve, the problems of the US health system.
Funds in health savings accounts not deposited in savings accounts insured by Federal Deposit Insurance Corporation are subject to market risk, as do other investments. While the potential benefits from investment gains can be seen as benefits, the downside, and the possibility of losing capital, can make a health savings account a bad choice for some people.
Consumer satisfaction
The results of consumer satisfaction have been diverse. While the 2005 survey by Blue Cross and the Blue Shield Association found widespread satisfaction among health savings account customers, a survey published in 2007 by employee benefits consultant Towers Perrin came to the opposite conclusion; he found that employees currently enrolled in the plan were significantly less satisfied with many elements of the health benefit plan than those listed in traditional health benefit plans.
In 2006, the Government Accountability Office report concluded: "HSA qualified plan providers who participate in GAO focus groups generally report positive experiences, but most will not recommend plans for all consumers.Some participants reported examining costs before obtaining health care services, although many researched the cost of prescription drugs. Most participants were satisfied with their eligible HSA plans and would recommend them to healthy consumers, but not to those who use maintenance treatments, have chronic conditions, have children, or may not have the funds to meet the deductibles high. "
According to the Commonwealth Fund, initial experience with eligible HSA qualified health plans expressed low satisfaction, high costs outside the pockets, and cost-related access issues. A survey conducted with the Employee Benefit Research Institute found that people enrolled in eligible HSA qualified health programs were very less satisfied with many aspects of their health care than adults in a more comprehensive plan.
- People in this package allocate large amounts of income for their health care, especially those with poorer health or lower incomes.
- Adults in a highly reduced health plan are much more likely to delay or avoid the necessary care, or skip the treatment, because of the cost. Problems are felt deeply among those with poorer health or lower incomes.
- Few Americans have health plans that have the information they need to make decisions. Only 12 to 16 percent of insured adults have information from their health plans about the quality or cost of care provided by their doctors and hospitals.
Some policy analysts say that consumer satisfaction does not reflect the quality of health care. Researchers at RAND Corporation and the Department of Veterans Affairs asked 236 vulnerable elderly patients on two managed care plans to assess their care, then examined treatment in medical records, as reported in the Annals of Internal Medicine. No correlation. "Health care patient ratings are easy to obtain and report on, but do not accurately measure the technical quality of medical care," said John T. Chan, UCLA, lead author.
Health policy
According to a 2006 Zogby poll, seven out of ten voters re-take congressional action to allow HSA participants to pay their insurance premiums using the money in their savings plan.
See also
- Direct primary care
- Single payer health care
References
External links
- US. Treasury Resource Center, Health Savings Account (HSAs)
- IRS 969 Publications, Health Savings Account and Other Paid Health Plan
- IRS 502 Publications, Medical and Dental Costs
- IRSA HSA Contribution Limit for 2014, 2013, 2012
- FAQ on HSAS: Frequently Asked Questions on a Health Savings Account from the American Academy of Actuaries (October 2007)
- "The History of Health Savings Accounts" Published by the HealthCare Consumerism Institute
Source of the article : Wikipedia
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