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Individual and Family California Health Savings Accounts
High Deductible Health Insurance Plans and HSA Qualified Health Plans
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California Health Savings Accounts / HSA
What is a Health Savings Account (“HSA”)?
- A Health Savings Account is a special account an individual can set up at a bank to help pay for their health care expenses on a tax-free basis.
You must first be covered by a HSA qualified health insurance plan also know as a High Deductible Health Plan (HDHP) before you can open a Health Savings Account. Since a High Deductible Health Plan has a lower monthly premium, the money that you save on the monthly health insurance premium can be put into the Health Savings Account.
One of the best parts of an HSA is that you own and you control the money in the account. Decisions on how to spend the money are made by you, not a health insurance company or some other 3rd party decision maker. The one restriction is that you must spend the money on medically necessary expenses. You also have the freedom to decide what types of investments you want to put the money in.
What Is a “High Deductible Health Plan” (HDHP)?
- A High Deductible Health Plan (also known as Catastrophic Medical Insurance) is an inexpensive health insurance plan that doesn't’t pay for any health care services until the deductible is met. You can use the money you deposited into your HSA (Health Saving Account) to pay for doctor visits, prescriptions, lab work and x-rays and other medically necessary services. Generally, a High Deductible Health Plan covers you in full after the deductible is met.
For 2009, in order to qualify to open an HSA, your HDHP minimum deductible must be at least $1,150 (self-only coverage) or $2,300 (family coverage). The annual out-of-pocket (including deductibles and co-pays) for 2009 cannot exceed $5,800 (self-only coverage) or $11,600 (family coverage). Some California health insurance carriers do have first dollar coverage for preventive care. Also, some carriers apply higher out-of-pocket limits for non-network services.
The Internal Revenue service (IRS) allows a catch up provision individuals who are 55 years old or older.
The catch up amount is $1,000 (for 2009) above the regular $1,150 for individuals.
How can I get a Health Savings Account?
- People who own a High Deductible Health Plan (must be one of the HSA qualified health plans or designated as an HSA plan) can sign up for HSA's with credit unions, banks, insurance companies and other approved companies.
How much does an HSA cost?
- An HSA is a savings account into which you can deposit money on a tax-preferred basis. Some banks and institutions charge a monthly administration fee to keep the account open. Also you must first purchase an HSA qualified health insurance plan before you can open the savings account.
How can I get a High Deductible Health Plan (HDHP)?
- Several California Health Insurance companies that offer HSA qualified and High Deductible Health Plans. At MattsInsurance4CA.com you can use our quoting tool to compare HSA qualified health plans from all the leading California health insurance companies.
One question we get asked a lot: Can I use the money in my HSA to pay for my health Insurance?
The answer is generally going to be NO. But, if you are collecting Federal or State unemployment benefits you CAN use the money in your health savings account to pay for your health insurance plan. Also if you have COBRA through a former employer you can use your HSA money. If you do fall into one of these two categories we strongly suggest you keep accurate documentation and double check with your HSA bank.
California Residents Can Apply for Health Insurance through MattsInsurance4C.com
If you're a California resident, or if you're thinking about moving there, and you need to purchase health insurance, MattsInsurance4CA.com can help. Matt Lockard is an independent insurance agent who works with all of California’s leading health insurance carriers. We have over 15 years of experience in California insurance, and we've learned how to listen to customers like you.
When you shop for insurance at MattsInsurance4CA.com, you get an easy to read side-by-side comparison of the leading California health plans to choose from. What’s more, you also have the convenience of signing up on the spot, or you can call us for an information and enrollment kit. After all, we want to make your time with us as easy and trouble free as possible. Click the link below to get an instant California Health Insurance quote. Once you see the quote find the HSA tap near the top banner to display all the HSA's that are available in your area. Feel free to call if you have any questions.
2009 HSA CONTRIBUTION LIMITS
Plan Type 2008 2009
Single Plan $2,900 $3,000
Family Plan $5,800 $5,950