Reduce your health care costs

Saving money on your health care costs is another advantage. The beauty of the HSA is that it allows you to choose a higher-deductible plan without exposing yourself to higher risk.

A higher-deductible plan reduces your premium, and you can apply the savings to help fund your HSA.

Here's an example * of how it would work. Suppose that under your old plan, you paid $400 a month in premiums and had a $500 deductible. With your HSA, you raise your deductible to $1,200, which lowers your premiums to $250 a month. You put $100 a month (one-twelfth of your $1,200 deductible) into your HSA, for a total monthly outlay of $350 (your $250 premium plus your $100 HSA contribution).

In that example, the outright savings are somewhat modest—$600 in year one. The more important figure is the $1,200 in your HSA—money that would have gone to the insurance company, but instead, you have retained control over it. You may use some or all of it to cover your deductible or other qualified medical expenses.

Or, if you are fortunate enough to have few medical expenses, some or all of that money might be sitting in your account at the end of the year. Your actual out-of-pocket cost is similar to that of the regular insurance plan in a high-claims year. Click here to learn more >> Department of Treasury - HSA Info.

HSA Insider, a division of Canopy Financial and online leader in Health Savings Account (HSA) education and related services, announced on Febuary 26th, 2009 the release of its eighth edition of HSA Road Rules, the most widely distributed reference guide on HSAs. Both employer and consumer versions are available for immediate download at www.hsainsider.com.