Ohio HSA accounts in 2013 will continue to be one of the most affordable options for securing affordable medical coverage. Single and family policies can be purchased from almost every large insurance company in the state. We make it easy for you so you can apply directly through our website. The IRS has also changed some of its contribution and deductible limits for Health Savings Accounts contracts.
In 2013, the minimum deductible allowed for an individual contract is $1.250. This is $50 higher than in 2012. An HSA with more than one person included (considered a “family”) is now $2,500, which is a $100 increase from last year’s limit. Keep in mind that these are “minimum” deductible amounts, and typically, you will benefit more when you select a higher deductible. However, you may not be able to change deductibles if you can’t qualify medically.
Why You Should Consider A Higher Deductible
For example, while a $2,500 family deductible would mean less potential out-of-pocket cost for a serious hospital claim, you are likely to lose money in the process. Here’s how: Almost every time, the extra cost associated with a $2,500 deductible plan is substantially higher than a $6,000 or $7.000 deductible. That is, you may pay between $2,000 and $3,500 more per year for a benefit you hardly ever use.
Examining this over a period of five years, you pay $10,000 (and often more) in premiums. It is unlikely that you will meet or exceed your deductible the necessary two or three times needed over the five-year period to break even. I base that analysis on my 30+ years of experience in the business along with my first-hand knowledge of owning an HSA! Although there is no guarantee you won’t have many huge claims, the odds are simply against that occurring.
Contribution maximums have also increased for 2013. For individual accounts, the new limit is $3,250, an increase of $200. For family accounts, the new limit is $6,450, which also represents an increase of $200 from last year. The “bonus” or “catch-up” amount remains unchanged at $1,000 if an Ohio HSA owner was at least 55 years old and wanted to make contributions above the stated maximums.
Of course, these are the “maximum” amounts that you can deposit into the savings portion of the policy. The vast majority of consumers do not come close to meeting or exceeding these numbers. Most persons tend to slowly deposit funds, perhaps in the $50-$150 per month range. Of course, more is allowed and you can abruptly stop or start your deposits at any time (assuming you have not reached maximums).
You Can’t Tax-Deduct Everything
It’s important to only use the account for “qualified” deductions. Otherwise, the IRS imposes a pesky 20% penalty! For example, non-prescribed prescriptions (over-the-counter) are no longer deductible due to a ruling change by the Obama administration in 2011. If IRS forms 5329 or8829 are needed, we can help explain details.
High Deductible Plans must accompany this type of coverage and you can view all of the best options live on our website through our quote box. Usually, Anthem, Medical Mutual and UnitedHealthOne feature the most competitive rates. Occasionally, Humana will sneak into the mix. For retired persons, MSA accounts have become very popular and are ideal choices if you tend not to meet your deductible.
For my personal account (my wife and two children are also included), we deposit $200 per month into the HSA portion. Fortunately, we have no health problems and the account has grown to a point where it will reach the ceiling of what we can have in there. And, that’s precisely what you want. Although we use very little of the deposits, we still take the $2,400 tax deduction each year. It’s a wonderful concept.
We use Chase Bank and have had no problems since we created the account more than a decade ago. All transactions are online although I’m certain there is a local office here in Springboro (somewhere!). Our monthly maintenance fee is $3. I am not endorsing Chase, but simply pointing out that any large reputable bank can probably effectively handle the HSA side account. Credit Unions may also be able to create an account.
There are certainly pros and cons for using any type of Medical Savings Account. You can contact us anytime and we’ll give you an accurate unbiased assessment. You can also view additional HSA plans in Ohio information.