It's the Most Wonderful Time of the Year

Have you met your 2017 health insurance deductible and/or out of pocket limit? If so, you should try to take advantage of your benefits before it all resets in January.

Most insurance plans run from January to January, but double check with your insurance carrier to see when your start and end dates are. Nowadays, it is common for health insurance plans to have deductibles that can be as high as $6550 for an individual.(A deductible means: that your insurance coverage does not even start until you paid off enough claims to total that amount). This seems like an undesirable situation because you basically do not have health insurance coverage until you pay that down.

The upside is that if you do have one of these high deductible plans ($1300 or more) you qualify for a tax deferred health savings account.

What is that?

A health savings account (HSA) is a great way to budget how you will be paying for a large portion of your healthcare costs for the year. Most banks offer these types of accounts with a tax break benefit for those savings. The premiums for high deductible plans are typically lower, so the extra savings can be put into the account to be used for medical bills. Many employers also offer programs that match contributions to these HSA accounts. For 2017, the max amount that you can contribute is $3400, but the balance will rollover from year to year. The account can also earn tax deferred interest, which is yet another benefit. The HSA is a great perk for anyone with a high deductible insurance plan who has to plan on spending any of their own money on medical bills.

In a perfect world, we would never be sick and just build up that HSA each year. Life happens and sometimes we meet these high deductibles due to unforeseen circumstances. If you do end up meeting your yearly deductible, then take advantage of the 50-100% coverage that you paid thousands for! Try to make those appointments for non-emergency medical services and items (like your bras and breast prostheses) that you have been putting off.It is hard to say where the health insurance industry is headed, but the combination of a high deductible insurance plan linked with an HSA is seeming more popular each year.

It is best to familiarize yourself with your health care coverage as much as possible so that you can take full advantage of your benefits.

For more information check out the link to the IRS website

https://www.irs.gov/credits-deductions/individuals/health-savings-account-hsa-at-a-glance

https://www.healthcare.gov/glossary/high-deductible-health-plan/