If you are considering changing your health insurance
policy, you should be aware of the alternative of a
Health Savings Account (HCA).

Health Savings Accounts started to become available
(and legal) in 2004, allowing people with
high-deductible insurance policies to set aside
tax-free money to fund medical expenses up to the
maximum deductible price.

If you don’t need to use those funds, they rolls over
every year. Once you reach age 65, you don’t have
to use it for medical expenses, although you
can; you can also withdraw money under the same
conditions as a typical IRA.

Although you will be penalized if you use the money
for non-medical expenses prior to age 65, you can use
the funds for vision care, alternative medicine or
treatment and dental care.

For 2008, an individual may fund up to $2,900 tax
free. The maximum deductible would be $1100 and the
maximum out-of-pocket expense would be $5,600.

For a family, the maximum tax-free contribution is
$5,800 with the maximum deductible of $2,200 and the
maximum out-of-pocket amount would be $11,200.

Health Savings Accounts are a feasible way to
shelter income and give you catastrophic insurance
coverage in light of the high cost of low-deductible
health insurance plans.

For most healthy people, it deserves some attention. Consult
with your insurance agent for all of the details
involving this way to managing your insurance
needs.

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