Combining a Kentucky high-deductible health plan (HDHP) with a health savings account (HSA) can help you reduce your monthly premium and save money.
Health Savings Accounts (HSAs) are becoming more and more popular in Kentucky and in other states. With health care costs rising, a HSA paired with a High Deductible individual health insurance Kentucky plan is a great way to save money. Read on to learn how. A HSA is a special savings account in which you can save money to pay for your current and future medical expenses. The contributions that you make to your HSA are tax-free. You can open a HSA if you have a HSA-compatible high deductible health plan (HDHP). How combining a HSA with a Kentucky HDHP saves money: • A HDHP-HSA plan has a lower premium than a traditional health insurance plan. The money that you save on your premium can be put into your tax-advantaged savings account and used to pay for your qualified medical expenses, current and future. With a traditional plan, more money goes into paying premiums regardless of the health care services you use. • Unused funds in the HSA stay invested and continue to earn tax-free interest year after year. • Contributions made to your HSA from your salary are not taxable. • If contributions are made to your HSA with after-tax dollars, the amount can be deducted from your gross income, so that you pay that much less income tax at the end of the year. • The money that you withdraw from your HSA to pay for your medical expenses is not taxable. In summary: A Kentucky HSA HDHP plan can save money with low monthly premiums and allow you to benefit from tax savings. Qualified Medical Expenses that HSA Funds Can Pay For The qualified health care costs that HSA funds can pay include (but are not limited to): • Prescribed medications • Over-the-counter medications with a prescription • Insulin/diabetic supplies • Bandages • Contact lens supplies • Dental visits/orthodontics • Eyeglasses • Long-term care insurance premiums • COBRA coverage cost • Medical insurance premiums while receiving federal or state unemployment compensation • Post age-65 premiums for coverage other than Medigap or Medicare supplemental plans Are you Eligible for a Health Savings Account? As mentioned earlier, one of the conditions for opening a HSA is that you must have a High Deductible Health Plan. Other requirements include: • You do not have other disqualifying coverage such as a non-HDHP plan • You are not enrolled in Medicare • You are not claimed as a dependent on another person's tax return For More Information One of the biggest advantages of the HSA is that if it is available through your employer, you would still have it even if you left your job. You can continue to make tax-free-contributions to your HDHP-HSA individual health insurance Kentucky plan and save money. Leading health insurance Kentucky companies offer a variety of HDHP-HSA plans. Contact an experienced Kentucky health insurance broker for more information and guidance to choose the right option.
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