Arizona Health Savings Account
Health Savings Accounts (HSA’s) are tax advantaged savings accounts designed to help Americans save money on health care costs. A Health Savings Account is an alternative to traditional health insurance in its plan design yet still has all of the comprehensive health benefits of traditional health insurance. Arizona residents can take advantage of these benefits by doing some simple research.
The Two Components of an Arizona HSA
Arizona Health Savings Accounts are in fact very simple and straightforward. There are two components: the insurance component and the savings account component.
Arizona HSA - Insurance Component
The insurance component is a standard high deductible plan with no coinsurance and no co pays. The nice thing about this type of plan design is that your maximum out of pocket cost is always equal to your deductible (this is true of all Health Savings Accounts in Arizona that have 0% coinsurance but if you run across a plan with 80/20% coinsurance then just realize that your out of pocket costs will be higher than the plan with the 0% coinsurance).
For example, if you have an Arizona single HSA with a deductible of $2,850 then that means that the most you will ever have to pay during the calendar year is $2,850. If you go to the doctor 3 times and the cost is $150 each time then you will pay $450 (not taking into consideration the fact that all large insurance companies will still negotiate lower rates for you from their in network providers). If you break your leg and the hospital bill is $30,000 then you will pay $2,850. If you get cancer and the bill for chemotherapy and other treatment is $225,000 then you will pay $2,850.
You get the idea – if you have no coinsurance then your annual maximum out of pocket is always equal to your annual HSA plan deductible! What makes this insurance component of the Health Savings Account so attractive is that the monthly premiums are substantially lower than traditional low deductible plans because of the HSA’s higher deductible and lack of pricey extras like copays.
Arizona HSA - Savings Account Component
The savings account component of an Arizona Health Savings Account allows you to save money each year to pay for qualified medical expenses. The nice thing about the money in the savings account is that you get an above the line tax deduction for all money you put into the account (up to certain annual IRS limits), the money grows tax free and the money is able to be withdrawn to pay for qualified medical expenses tax free. Unlike a Flexible Spending Account the money in the account rolls over from year to year. The money in the account is even able to be used for retirement or other types of expenses when the account holder reaches age 65.
With an HSA you should save a balance in the savings account component of the plan so that as the money rolls over each year you can use it towards major qualified medical expenses and your annual deductible, all the while enjoying some superb tax benefits (note that the above the line tax deduction for contributions into the Arizona Health Savings Account is not phased out based on AGI limits so no matter little or how much you make you can still enjoy the tax benefits of the HSA contribution!).
Save Money On Arizona Health Insurance Now!
Arizona residents can enjoy the many benefits of Health Savings Accounts like tax free savings that rollover from year to year, lower monthly health insurance premiums with their qualifying high deductible health plan, comprehensive health insurance coverage, and lower planned out of pocket costs while enjoying the simplicity of a deductible only health plan.
To compare HSA’s, copay plans, and other traditional health plans side by side from the top insurance companies that offer coverage in your home area just enter your zip code into our free AZ quote finder into the top of the page or on our home page. Get a free Arizona health insurance quote comparison now!