Health Savings Accounts: Health Reimbursement Accounts

Health Savings Accounts: Health Reimbursement Accounts

The health reimbursement account is another version of the Health Savings account. It can save money, but it does give your employer an incredible amount of control. This program needs to be considered carefully before signing on.

Some workers and employers are opting for the health Reimbursement arrangement. This arrangement makes it possible for employees to pay for medical expenses and keeps some of the costs down for employers. Anyone is eligible who works for an employer who provides this scheme.

The Health reimbursement arrangement covers those medical expenses that have not been reimbursed as described by the IRS. Generally, those that are not covered by your standard
health insurance policy.

Other types of health savings account offer a fair degree of flexibility. The Health reimbursement arrangement allows your employer to decide and set most of the rules. Your employer has the right to decide who can put funds into your account. They can also decide if you need a health insurance policy. The employer also has power to decide when you are eligible to use your account. They also decide whether you lose your money should you change jobs. The health reimbursement arrangement is tax free if you are the one making the contributions.

The health reimbursement arrangement is an effective way to create a health savings account. However, it does give your employer a lot of power over your account. Other types of accounts allow you to take the funds with you if you change jobs and allow for multiple entities to deposit money. However, your employer may set good conditions for you to make the health
A reimbursement scheme is an attractive option.

Health Savings Accounts: Contributions and Deductibles

Health Savings accounts are a promising idea. However, as with anything in life there are limits. Before deciding, which is the best option for you, you need to know the contribution limits of the health savings account.

When opening a health savings account, many need to know how much they are allowed to put in. They also need to know what other terms and conditions apply to their account.

There are limits to how much you can put into your account annually. However, a standard health savings account allows you to carry this money over from year to year.

Generally, your contribution limit is based on a high deductible insurance policy. In 2007 account holders were allowed to place 2,850 $ annually for a single person and 5,650% dollars for a family. This is equivalent to the amount of the deductible on both policies. If you’re over the age of 55 and an additional contribution of 800$ is allowed.

This may not sound like a lot of money, but one must remember that these funds are only used on medical expenses that your insurance policy does not cover. The money can also accrue interest and can be carried over from year to year and employer to employer.

When opening a health savings account, you must have a high deductible health insurance policy. The minimum requirement for a high deductible health plan is 1050 for singles and 2,100 for families. You also have limits on the annual out-of-pocket expenses. For singles it cannot exceed 5,250 and families 10,500.

Although there are limits on contributions, a health savings account can be a life saver when it is needed. You have control over the money and don’t have to worry about if your insurance will cover the expense.

Health Insurance & Savings Account Made Easy

Regards, Coyalita


See Next: Health Savings Accounts: The Pitfalls

Share on Social Media