We are going to talk about Health Savings Account or HAS contributions in this video. First of all what is a Contribution? It is the amount that you deposit into your Health Savings Account, that savings account at a bank.
Why should you want to contribute? Well, you make some savings on your income taxes just for making the contribution whether you use the money or not, but it's important, it's not like a Flexible Spending Account actually you might have had your place of employment. A flexible spending account if you over-estimate you lose that money. This is not the case here, if the money is yours it doesn't go away.
Now this is tax free money. The contribution that you make is not taxed; consequently you can use this money to pay your medical expenses with pre-tax dollars. That kind of money goes farther which we use it on -- well, you can use it for doctor's visits, medications, acupuncture, chiropractic, dentist, the eye doctor over the counter drugs, there are a bunch of things you can use it for, so this is medically related.
Well then, when can I make my contribution? You can make it monthly or you can do it all in a lump-sum, just as long as you do before April 15th of the following year and if you want credit in that year. You don't have to make a contribution at all. Many people don't make contributions. They have no trouble making the payment for the premium on the insurance. But, if you don't make a contribution you'll still get the negotiated pricing on your doctor's visits and medications.
How much can I contribute? Well, this is nice; it's not longer limited by the deductible on your high-deductible health plan, the insurance part. It's limited only by an index dollar amount which the government will announce each year.
Well, so what are the contribution limits in 2008? Well, it's $2,900 for individuals with single coverage, and $5,800 for individual with family coverage.
What is this Catch Up Provision? If you are between the ages of 55 and 65 you can contribute an additional $900 per year to your savings.
How do I claim the contribution? Well, when you do your income taxes they are going to say, well, how much did you contribute to your has? They will also ask you, how much did you contribute to your IRA, your Individual Retirement Account which you may have also contributed to. They are very similar in a lot of ways.
We have covered a lot, it's your choice. You can study the documents on richdayhealthplans.com/blog. Well, better yet, just give me a call 888-759-1738.
I'll explain it until you get it.
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