The idea behind the Medicare Prescription Drug, Improvement and Modernization Act of 2003 was to help people save for their medical expenses now and in the future. A good idea on the surface, but looking into it further may change your mind. First of all in order to open a Health Savings Account, you must have what is called a High Deductible Health Plan ( HDHP ) - meaning you pay for your own medical expenses up to a certain dollar amount. After that amount has been reached, anything over that dollar figure is covered.
If you have a High Deductible Health Plan then you reap several tax - free advantages with a Health Savings Account such as: the person ( s ) opening the account can contribute to it and not have to provide itemized deductions; an employer makes tax - free contributions to a worker and employers who have a cafeteria plan may allow workers to contribute untaxed salary by means of receiving a lower salary.
A cafeteria plan is an employee benefit, usually relating to, but not always, health care benefits. Its name is derived from early benefit plans that let workers choose between different types of benefits, much like an a la carte menu.
If you are over the age of 55, you may catch up by adding more money to the Health Savings Account. If an individual enrolls in Medicare they aren ' t eligible to contribute to their HSA. As you can see there are some areas of concern about how the Health Savings Accounts are structured.
Most individuals are much more aware of and comfortable with Co - pay plans. The reason they ' re happier with Co - pay is the reduction in fees paid to doctors, for medications and preventative health care. For example, instead of paying $100 for a visit to the physician, the person would instead pay $25. 00. That ' s a big difference for a family with three children who need to see a doctor.
If you have a High Deductible Health Plan then you reap several tax - free advantages with a Health Savings Account such as: the person ( s ) opening the account can contribute to it and not have to provide itemized deductions; an employer makes tax - free contributions to a worker and employers who have a cafeteria plan may allow workers to contribute untaxed salary by means of receiving a lower salary.
A cafeteria plan is an employee benefit, usually relating to, but not always, health care benefits. Its name is derived from early benefit plans that let workers choose between different types of benefits, much like an a la carte menu.
If you are over the age of 55, you may catch up by adding more money to the Health Savings Account. If an individual enrolls in Medicare they aren ' t eligible to contribute to their HSA. As you can see there are some areas of concern about how the Health Savings Accounts are structured.
Most individuals are much more aware of and comfortable with Co - pay plans. The reason they ' re happier with Co - pay is the reduction in fees paid to doctors, for medications and preventative health care. For example, instead of paying $100 for a visit to the physician, the person would instead pay $25. 00. That ' s a big difference for a family with three children who need to see a doctor.
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