March 2nd, 2010 | 
Author: Health Savings Accounts (HSAs) combine lower cost premiums, higher deductibles, and a tax favored savings account. With an HSA you get a tax deduction on the money that you put into the HSA account and your money grows tax deferred in your account. You spend the savings, tax free to help pay your deductible or to pay for qualified medical care (which often includes prescriptions, vision, and dental care).
The money that is not used at the end of the year will continue to accumulate over the years. With many HSAs, you will earn interest on your savings beginning with the first dollar deposited. Clients that may be interested in HSAs are those who want more control over how their healthcare dollars are spent; families interested in one calendar year deductible per family; and those interested in trading low deductible health insurance for a higher deductible plan to save money on premiums and taxes. Below is some basic HSA tax information:
- Eligibility - Those covered by a qualified high deductible health insurance plan and are not covered by any other health insurance or enrolled in Medicare, and cannot be declared a dependent on another person’s tax return.
- HSA Contributions – 100% tax deductible from gross income.
- Qualified Medical Withdraws – Tax Free.
- Interest Earned – Tax deferred; if used for qualified medical expenses; tax free
- Non-Medical Withdraws – Income Tax + 10% penalty tax (under age 65); income tax only (for age 65 and older).
- Death, Disability – Income Tax only – no penalty.
High deductible plans usually accompany the HSA. This is the actual major medical insurance that the client purchases. As a health insurance agent you want to make sure a high deductible plan and HSA is appropriate for your clients. Be sure to explain all of the tax implications and deductibles with your clients.
Those who may benefit from a high deductible plan are those who are willing to take financial responsibility for routine healthcare expenses in exchange for a lower premium; those seeking lower cost protection from unexpected accidents and illness; and those who retire early and need a bridge to Medicare.
Health insurance agents may also want to consider Short-Term coverage to bridge client’s gap in health insurance coverage. These types of plans are becoming more popular and you can create a niche in your business by locating clients with this need. Good candidates for this type of insurance are those who:
- Recently lost coverage due to a job loss
- Are students no longer eligible for coverage under their parent’s plan
- Are seasonal workers
- Retired and are waiting Medicare eligibility
Get more information about niche markets and increase your sales: healthinsuranceagenthelper.com
Article Source: Find Your Niche Through Health Savings Accounts
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