HSA - Health Savings Accounts in Oregon

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HSA Eligible Plans:

Under the legislation passed by Congress, the HSA must be coupled with a high-deductible medical insurance plan. Individuals (Group Plans are also available) pay small medical bills out of their own pocket up to the deductible but have medical coverage in case of serious illness or accident. $1,150 deductible plan with a total out of pocket maximum of $5,800 per individual, and aggregate deductibles of between $2,300 with a maximum of $11,600 out-of-pocket for families. There are 7 companies in Oregon as of this writing which offer Individual and Family HSA qualified Major Medical Plans; Time Insurance Company, John Alden, Lifewise WiseSavings plan, FlexPerks from PacificSource, ODS has their HSA Choice Option & HSA Value plans, Regence and their HSA Qualified Plan, and also HealthNet has their Crystal HDHP 80 and Crystal HDHP 100 plans.  We represent all of them.

Things that cause a common health insurance plan not to qualify as HSA eligible:

• A plan that has an individual deductible lower than $1,150
• A plan that has a "family out of pocket maximum" that is greater than $11,600 ($5,800 for an individual)
• A plan that has a separate prescription benefit (ie - 50% not subject to a deductible)
• A plan that has a doctor visit copay for "non-preventative" services.

Health Savings Account (HSA)

Health Savings Account (HSA) plans offer the ability to build up savings to pay for future medical expenses as a tax exempt savings account that is owned by you and managed by a financial institution. Like an IRA, contributions to an HSA are tax deductible and continue to grow tax deferred. Also, you can still deduct 100% of your monthly premium if you are self-employed. The cost of a high-deductible health plan is lower than a low-deductible plan. The contributions to an HSA can be used to pay for health care that is not covered under your traditional or PPO individual health plan. Examples of some of these forms of treatment are vision, acupuncture, chiropractic, or dental care. All of your unused contributions to the HSA will continue to grow. At age 65, you can use these accumulated funds as retirement income or to offset future health care costs such as long term care. All of the money deposited into your personal HSA is your money. If you change jobs or move, your HSA account still belongs to you.

Contributions are allowed up to 100% of the health plan deductible. The maximum annual contribution is $3,000 for self-only policies and $5,950 for family policies (indexed annually). Individuals 55-64 may make additional "catch-up" contributions of up to $1,000 annually in 2009 and thereafter. A married couple can make two catch-up contributions as long as both spouses are at least 55. Catch-up contributions will help individuals accumulate assets for retiree health expenses.

Contributions to HSA accounts may be made by individuals, family members and employers. Contributions made by individuals and family members are tax-deductible (for the account beneficiary) even if the account beneficiary does not itemize. Employer contributions are made on a pre-tax basis and are not taxable to the employee. Employers will be allowed to offer HSA's through cafeteria plans. The investment earnings accrue tax-free.

HSA distributions are tax free if they are used to pay qualified medical expenses. Distributions made for any other purpose are subject to income tax and a 10% penalty. The 10% penalty is waived in the case of death or disability. The 10% penalty is also waived for distributions made by individuals age 65 and older. Upon death, HSA ownership may transfer to the spouse on a tax-free basis.