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Affordable Nevada Health Insurance

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Nevada Health Insurance- Health Savings Accounts (HSA)

What is a Nevada Health Savings Account (High Deductible Health Plan)?

HDHP (High Deductible Health Plan) are used in conjunction with a "medical savings account" or HSA (Health Savings Account). Higher Deductible Health Plans are normally lower in monthly premiums than the "traditional" Nevada Health Insurance Plan. A Health Savings Account is a medical savings account that has tax advantages available to Nevada residents who enrolled in (and use) a High Deductible Health Plan. I know it sounds confusing, but here is link to a great video that will explain it a lot better! Unlike the "old" FSA's (flexible savings accounts), deposited funds roll-over and accumulate year over year if the funds are not spent (you keep your money!)... HSA's are owned by the Individual and funds may be used to pay for qualified medical expenses without federal liability. Withdrawls for non-qualified medical expenses are subject to penalty just like when you take money out of an IRA early.
HDHP (High Deductible Health Plan) are used in conjunction with a "medical savings account" or HSA (Health Savings Account). Higher Deductible Health Plans are normally lower in monthly premiums than the "traditional" Nevada Health Insurance Plan. A Health Savings Account is a medical savings account that has tax advantages available to Nevada residents who enrolled in (and use) a High Deductible Health Plan. I know it sounds confusing, Unlike the "old" FSA's (flexible savings accounts), deposited funds roll-over and accumulate year over year if the funds are not spent (you keep your money!)... HSA's are owned by the Individual and funds may be used to pay for qualified medical expenses without federal liability. Withdrawls for non-qualified medical expenses are subject to penalty just like when you take money out of an IRA early.

Who is eligible in Nevada for an HSA account?

1. You must be enrolled in a High Deductible Health Plan (HDHP) and not have any disqualifying coverage.

2. You cannot be enrolled in Medicare..This normally eliminates anyone over the age of 65. There are other alternatives for 65+ clients, please educate yourself...

3. You cannot be the primary applicant and also be a dependent on another person's tax returns. However, you can keep whatever HSA $$if someone does become ineligible.

4. Family members may have their own HSA, depending they each meet the eligibility rules. They can also be covered through the HSA of someone else in the Family. For example, a husband may use his HSA to pay for a spouse's expenses even though she may have her own HSA.

What can I use the money on in my HSA Account?

You are able to use the money (tax-free) on "qualified medical expenses" ; you can find those answers on the Health Savings Account Qualified Medical Expenses or call us and we can help clarify. In a nutshell, not only does it cover things that may be included in Health Insurance plan, but also things that may not be covered like:

over the counter medications
dental and vision costs
lodging for medical care
medical equipment
mental health expenses
pregnancy and maternity costs.

One thing to remember is that even though you can use the money in your account for these expenses, not everything counts towards your deductible. At death, if a surviving spouse is the designated beneficiary of an HSA, it becomes a HSA for that widow or widower. If someone other than a surviving spouse is the designated beneficiary, the HSA is terminated as of the date of death and the fair market value becomes taxable income to that person. If there is no designated beneficiary, the remaining assets become part of the deceased's estate.

What are the advantages and disadvantages of these types of plans?

Advantages:

The money deposited in an HSA provides both federal and state income tax deductions in Nevada. Withdrawals to pay for qualified medical expenses are tax free.

A Health Savings Account is portable and can be transferred to whatever bank or financial institutions of your choice, even if you change employers.

There is usually only one deductible to be met for the entire family instead of having separate deductibles for each person.

Unlike a flexible spending account that needs to be used by the end of each year for tax savings, money that is in your HSA stays in your account and rolls over from year to year. It can earn tax free interest when it is not being used and can have many different investment choices.
Lower premiums for HSA eligible Health Insurance policies than traditional plans with similar deductibles and coinsurance.

You can withdraw money out of your HSA account for any reason after age 65 without penalty.

You should consider an HSA if you've been paying more for Health Insurance premiums that you've been using in health care.

Disadvantages:

HSA plans generally have higher deductibles than traditional plans and do not pay for any expenses (in some cases it will pay for wellness/preventative care benefits) until the deductible is met compared to traditional Health Insurance plans that may cover doctor visits, prescriptions...

Tax penalties for withdrawals for any reason other than for qualified medical expenses unless aged 65 or older

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