Monday, April 6, 2009

Nanny Tax Season and Health Savings Accounts

2009 Health Savings Account Contribution Limits
By Adam Hyers

Yesterday we discussed Health Savings Accounts (HSA). With a new year comes increased amounts that health savings account (HSA) owners may contribute to their plan. HSA's contribution amounts will differ depending on whether the insured owns an individual or family plan.

Contribution Limits for 2009
The individual contribution limit for 2009 is $3,000 while families can contribute as much as $5,950.

These dollars can be used to pay for a variety of qualified medical expenses including doctor's office visits, prescription drug coverage, dental bills, meeting the policy deductible, co-insurance, as well as several other items. The IRS furnishes a list of qualified medical expenses at their website.

Health Savings Accounts Explained
All insurance companies offer health savings account qualified plans. Typically, the health insurance has a higher deductible and lower premiums. The insured can contribute to their HSA each year and then write that amount off of their income taxes - much like an IRA contribution.

The HSA will grow tax deferred and dollars spent on qualified medical expenses are withdrawn tax free. Typically, this type of insurance is appropriate for consumers who desire lower premiums and are also comfortable with some out of pocket expenses. The insurance company usually covers expenses at 100% after the deductible has been met.

Advantages of HSA's
Health savings accounts can be valuable for those who like to keep control of their health insurance dollars. In this way, the consumer can use their savings for routine doctor office visits, generic prescriptions, and other first dollar expenses.

Additionally, HSA qualified plans can be less expensive than traditional coverage offering the same deductible. Family plans usually only have one deductible that needs to be met before the insurance coverage begins whereas traditional plans might have two or more deductibles that need to be met. HSA plans are not right for everyone, but are an important addition to health insurance marketplace.

A.M. Hyers has been working in the insurance and investment industry for over ten years. He owns and operates Hyers and Associates, Inc. an independent insurance agency doing business in Arizona, Florida, Georgia, Illinois, Indiana, Missouri, Ohio, and Pennsylvania. His agency offers insurance products in the individual, family, and small business group marketplace. They use the leading national insurance carriers to quote health insurance, health savings accounts, dental, and vision plans. Other lines of insurance offered include life insurance, disability insurance, and long term care insurance. They use several carriers to quote Medicare supplement plans and Medicare Part D coverage for seniors. Additionally, the independent agents of Hyers and Associates Inc. offer fixed, indexed, and immediate annuity policies for individual and group retirement plans. Health savings account and health insurance quotes for those in Arizona, Florida, Georgia, Illinois, Indiana, Missouri, Ohio, and Pennsylvania. Visit them at: http://www.ohioinsureplan.com/

Do you have an Health Savings Account? Would you consider starting one?

2 comments:

Krishna said...

Tax Planning for 2009

Anonymous said...

The problem is that most nannies probably do not even get health insurance and you have to have health insurance before starting an HSA. They seem like a great idea for those who can negotiate an HSA or health insurance. I need help learning how to negotiate benefits I suppose. But, I do not think the link that Krishna posted in comments applies to this topic. HSAs do apply to nannies though and it is interesting info to know about. Most nannies do not even pay taxes according to statistics so for those that do it is good to know about HSAs.
-- A nanny from Philly