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HSAs have a ?triple? tax advantage from a federal tax standpoint. Individuals receive full tax advantages for HSAs on their Federal Income Tax return (or through a salary reduction program in certain employer-sponsored settings) regardless of particular state?s tax treatment of HSAs.

An account beneficiary may take an above-the-line deduction (i.e. the amounts may be used to determine the individual?s adjusted gross income before any itemized or standard deductions are considered) for contributions made to an HSA during any month of the individual?s taxable year that the individual is eligible. The permitted deduction cannot exceed the sum of the ?monthly limitations? for such months. In 2006, the monthly limitation for any month is 1/12th of the following amounts:

- For those with single coverage on the first day of the month, the lesser of the annual deductible under the HDHP or $2,700.

- For those with family coverage on the first day of the month, the lesser of the annual deductible under the HDHP or $5,450.

Funds in an HSA grow on a tax-deferred basis, and distributions from an HSA are tax-free so long as the funds are used for qualified (as defined by Section 213d of the IRC) health care expenses.

How does state tax treatment of HSAs differ from federal tax treatment?

HSAs (and the enabling legislation) are federal. As a federal program, each state decides whether to: a) comply with the federal guidelines, or; b) establish their own state guidelines regarding the tax treatment of HSAs. As a result, some income that may be tax-free at the federal level may not be tax-free at the state level.

Many states harmonize their tax treatment with the federal government. Read more…

The first question from one just terminated from his job is: What is COBRA and what are my rights and my options. Congress passed the landmark Consolidated Omnibus Budget Reconciliation Act (COBRA) health benefit provisions in 1986. First of all, COBRA can only be offered to employees and or their dependents if the employer has 20 or more employees. An employer can not legally keep an employee on his insurance plan if he or she is not a full time employee unless he or she qualifies for COBRA benefits. The employee and or his dependents can only stay on the past employers plan for up to 18 months unless the employee was released do to a disability. In the case of a disability the employee can stay on the plan for up to 29 months. In the case of employee death, legal separation, divorce or separation, or if the spouse becomes entitled to Medicare, the spouse and dependant children are entitled to 36 months of coverage. If a dependant child looses dependant child status he or she would also be eligible for 36 months of continued coverage. The down side to the COBRA option is that if you develop a medical condition while on the plan you may not be able to get the individual plan of your choice. The other negative is that the employer can charge up to 102% of his cost for regular COBRA and up to 150% of the last 11 months if you qualify as being disabled. I know this seems backwards, but that?s the way it is. Often COBRA is more expensive than an individual plan, but on the plus side if you enroll in another group plan with no more than a 62 day lapse in coverage there is no waiting for any preexisting condition. If there is a lapse in coverage of more than 62 days, preexisting condition will have a one year wait before being covered. Remember that you must decide within 60 days of the qualifying event if you want to take the COBRA coverage. Then you have 45 days to make your first payment from the date you elect to take Read more…

Jenny Thomas heaved a sigh of relief. A month ago she checked into her local hospital to deliver her first child, but unanticipated complications necessitated an emergency surgery. Fortunately both she and the baby were fine. But if it hadn?t been for her family?s health savings account (HSA), she could have ended up owing the hospital tens of thousands of dollars.

An HSA is smart savings plan that you use for unanticipated medical expenses. Usually, money that you sock away into the plan comes out of your paycheck before payroll taxes are computed, so that you maximize your savings rate. Furthermore, any income that the HAS plan itself generates (such as from interest or investment appreciation) is also tax free, so it grows fast. Some employers even contribute extra matching cash to the plan to encourage you to save.

In most parts of the country, to be eligible for an HSA you also need to hold a High-Deductible Health Plan (HDHP). An HDHP is a plan where the deductible ? that is the amount that you pay out of pocket, before the insurance ?kicks in? is somewhat higher that what you might have seen before: usually in the neighborhood of $2000 to $3000. The big idea behind the HSA/HDHP combo is that the premiums on the high-deductible plan are so much lower that even though you pay the first couple of thousand ?out-of-pocket? ? actually out of your HSA ? you save money in the long run over a traditional plan.

Hundreds of banks, credit unions and insurance companies offer HSAs, and it?s easy to sign up. Once you?re enrolled, you can use the money in the account for most any approved medical, dental, vision or disability health care or expense.

HSA?s differ from one another mostly in Read more…

Many children, families and adults qualify for free- or low-cost health insurance, and they don?t even know it! Your ability to get these state- and federally-sponsored medical programs is usually based on the size of your family and your income.

These programs vary state-by-state, so it?s important to check with your local government offices. However, many of the plans share similar qualifiers. Some groups of people that commonly qualify for low- or no-cost health coverage include:

1. Children and young adults under 19 years of age. Youth programs are common throughout the United States, and often include dental, vision and mental health or substance abuse counseling in addition to basic medical coverage.

2. Pregnant women. Available through Medicaid ? and often through state departments of health – you can qualify depending on your income and family size.

3. Seniors 65 years of age and over. People in this category are usually covered by Medicare, a health insurance program of the federal government.

4. Disabled People. If you?re permanently disabled, there?s a good chance you can qualify for Medicare.

5. Immigrants Needing Emergency Care. If you have a medical emergency, you might be eligible for a state-funded Alien Emergency Medical Program (AEM) which can pay for your emergency care. To be eligible for most Read more…

When you shop around for a health insurance plan, health insurance quotes can help narrow down your options and identify the best plan that fits your medical requirements and budget. The main types of quotes you will come across are:

* Indemnity of Fee-For-Service Plans ? These offer the most convenience and flexibility because they allow you to visit any doctor of your choosing. These plans are in high demand but are getting more expensive.

* Health Maintenance Organizations (HMOs) – Most health insurance quotes are this type nowadays. HMOs are a group of health care providers who bundle their services together at a fixed price. HMOs are suitable for people on a tighter budget who are not looking for any specialized services outside of the network.

* Preferred Provider Organizations (PPOs) – PPOs offer the flexibility of using both your managed group services such as with HMOs, and also services outside of their network without a referral such as with the Fee-For-Service plans. PPOs are a bit more expensive than HMOs but cheaper than Fee-For-Service plans.

Once you have decided which plan to go with, the cheapest way to obtain health insurance quotes are through group coverage, such as from the workplace or professional organizations etc. If you cannot find any group coverage, individual coverage is another option, though far more expensive.

When you have purchased your plan, make sure to familiarize yourself with the health insurance coverage, which is a contract that specifies what medical benefits your health insurance provider will and will not cover. The extent of the covered medical services depends on the fee that you pay your health Read more…

To discuss the terminology Group Health Insurance, we must first familiarize ourselves with the concepts Insurance and Health Insurance.

Insurance is a kind of protection, a safety net against unforeseeable losses. No one knows what the future holds, and insurance is a good way of preparing for what may come. Health insurance is a protection against medical costs. The insurer pays the cost of the insured person if the latter falls ill – due to accident maybe, or any of the covered causes. Magnify the health insurance more than ten times over and you get the Group Health Insurance.

Group Health Insurance is a health coverage based on a group of people under a company or an organization. The cost of the insurance is allotted among the members of this group. The group enjoys a wide range of benefits of Group Health Insurance. A master contract or policy is issued to their employer or to any of the group?s affiliations.

Health insurance is one of the most important benefits offered to an employee through their employers. Not only does an employee feel secure with this insurance, he also feels assured of the care of his employers. Companies spend billions annually for health insurance, and group health insurance make up the bulk of the revenues earned by health insurance companies.

Group health insurance can be availed by any company with two or more employees. Requirements vary around the world, though one constant requirement is the proof of legitimacy of the company?s operation. The number of employees to be Read more…

Group Health Insurance is necessary to attract and keep good employees. While employers may not like the cost of group health, they should be aware of the benefits to the company and overall morale. There may be things you as an employer can do to alleviate some of this costly pain. Also, all Group Health companies and insurance agents that offer them are not created equal.

The cost of this health insurance versus the need for solid employees should be weighed. There a perception that many in this country that employees will take a cut in pay if they were to be guaranteed a group health plan. There is a simple explanation for this reasoning. People know they will have to go the doctor. Women need to have mammograms and pap smears, the children need their shots and physicals, and men need their prostrate examined, people realize these services cost money. Employees often would prefer that you take money out their check for group health then for them to write a check each month for it.

Get up to Five Free Group Health Insurance Quotes

It is the job of to keep your group health cost to a minimum. If you already have a group health plan, you can raise the deductible to discourage overuse of coverage by your employees. However a dramatic raising of group health deductible or co-payment may cause some rumbling among your employees. Yet it is t is a good idea to start with a lower deductible, so you can absorb rate increases. (Your group health rates will go up) Also know beforehand what networks are in your area, and what health networks most of your employees’ doctors belong to.

It is very important to review and understand your group health quotes that you will receive. Any insurance agent or broker that provides you with initial group health quotes over the phone, without having your employees fill out any applications, is doing you a disservice. Unless the agent is the Great Houdini, no one in our field can give you a firm, group health quote without a thorough underwriting. Group Health Insurance is too complicated to be taken this casual. Remember, look for an agent that gets to know your particular situation, understand your needs, and has the group health benefits that meet your expectations.

Is going with the biggest named group health insurance companies, the best choice? Choosing the “big name” companies over less known, group health insurance companies with reputable ratings, may not be in your employees and yours’ best interest. All group health plan are not designed the same. If XYZ, Read more…

1. Health Savings Accounts (HSA)

This is a strategy where the employer buys a health plan with a large deductible. Typically, these are groups that are coming from a plan with a very low deductible. Since the higher deductible plans are usually much less money, the money saved is used to put into the employee’s “Health Savings Account.” The money in this account is used by the employee to pay qualified medical expenses. If it’s not used, the money rolls over to the next year. The money belongs to the employee, even if they leave the company.

2. Health Reimbursement Arrangements (HRA)

This is very similar to the HSA above but a portion of the qualified medical expenses not covered by the insurance is “pledged” by the employer, that is, the employer only spends the money, if there is a portion of the bill not paid by the insurance. This would be more favorable to the employer since on an HSA the money goes to the employee, whether there are claims or not. The problem with HRAs is that there are very few carriers that offer them right now.

3. Medical Reimbursement Accounts

This is very similar to HRAs above and extremely flexible. It’s otherwise known as partial self-funding. Employer buys a larger deductible and if the employee uses up that deductible, the employer pays all or a portion of it, depending on how a pre-arranged agreement is written. This goes for other expenses not paid by the insurance. The idea is that the employer self insures the typically smaller expenses with their own cash, (presumably, the savings in premium dollars from going to a higher deductible.) The downside to this is that many carriers prohibit the use of this strategy with their plans. It can be very effective but make sure you use an experienced third party administrator as there may be some legal and tax documentation required. Otherwise known as Section 105.

4. Kaiser.

More and more groups are moving to Kaiser. It is typically, benefit for benefit, less money than just about every other plan. Kaiser is spending billions on the future and their quality control is promising.

5. Offering Blue Cross and Kaiser side by side. Blue Cross has a new program where only five employees need to enroll with Blue Cross. The rest can be with Kaiser. This is a ground breaking opportunity in flexibility.

6. Blue Cross Elect. Blue Cross has a portfolio called Elect with 16 plans in it comprised of HMOs, PPOs, and an EPO plan. Read more…

Group Health Insurance is a benefit that some companies offer their employees, enabling them to receive private medical treatment quickly and at no cost should they need it. This means that employees receive the medical treatment they need without the long wait and undue suffering.

Of course, this type of scheme has many benefits to both the staff and the employer.

For the employer, a member of staff needing medical treatment will receive it quickly, thereby helping speed up recovery and keeping disruption due to sickness in the office to a minimum. The employee will also be more focussed on their job as they will not be spending time worrying about a long wait for the treatment on the NHS, or a diagnosis etc or suffering undue pain.

For the employee, being a member of a Group Health Insurance plan has many valuable benefits, which a monetary value cannot be put on. In the first instance, they don?t have to pay out huge premiums for a private medical insurance plan – which can literally run into three figures every month. And they have the peace of mind that should they need it, expert medical help is available immediately.

As part of the Group Health Insurance Plan, many companies who do offer this benefit to staff will also pay for their employees to have a once a year ?healthcheck? at a private hospital. These health checks cover weight, height, levels of fitness, blood pressure, blood tests etc and are carried out to check that the member of staff is in optimum health or to spot a so far undiagnosed condition. Either way, the screening is beneficial to staff and their employers.

For an individual who is not part of an employers scheme to have the same sort of health screening, the cost can be anything from ?150 upwards, so there is an added value Read more…