The HSA Strategy

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The HSA Strategy Concept

• Step 1: Enroll in an HDHP
  To protect against large, unexpected health expenses
• Step 2: Open an HSA
  To pay routine expected health expenses
• Step 3: Set a goal to save and invest unused HSA dollars
  To provide a lifetime of benefits

The High Deductible Health Plan (HDHP)

• Minimum Deductibles (2009)
  Individual: $1,100
  Family: $2,200
• Out-of-pocket maximum (2009)
  Individual: $5,800
  Family: $11,600
• NO copays for office visits
• NO copays for prescriptions
• YES copays for preventive

The Health Savings Account (HSA)

• Eligibility
  Have an HDHP
  No other non-HDHP health coverage
  Not enrolled in Medicare
  Not claimed as a dependent
  18-65 years of age
• Contributions and Distributions
  Tax-deductible contributions (2009)
  Individual maximum $3,000
  Family maximum $5,950
  Tax-free withdrawals for eligible expenses
• Two philosophies for using HSA
  Save now, spend now (spenders)
  Save now, spend later (savers)
• Eligible expenses
  Diagnosis, Treatment and Prevention
  Medical, dental, vision, alternative care etc.
  LTCi premiums
• A Lifetime of Benefits
  Current health care expenses
  Future expenses up to age 65
  At retirement:
  Medicare premiums: parts B and D
  Expenses not covered by Medicare:
  Medicare deductibles, coinsurance, physicals, dental and vision
  LTC insurance premiums
  Un-reimbursed LTC expenses
  Pass onto spuse tax-free
  Other uses (taxed like IRA):
  Use HSA to supplement retirement
  Final Expenses
  Pass on to heirs