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What Is An HSA (Health Savings Account)?

What is a Health Savings Account (“HSA”)?


A Health Savings Account is a substitute to conventional health insurance. It is classified as a savings product that offers an alternative option for consumers to obtain comprehensive medical benefits (including maternity) at a very reasonable rate.  HSAs allow you to pay for current medical bills and save for anticipated future expenses (medical, dental and vision). Money not spent accumulates in a fund you control and manage.

Although there have been many recent legislative changes to the US healthcare system, catastrophic plans that feature low premiums are growing in popularity, especially since the cost of these policies tend to remain fairly level.  Subsidized plans can potentially pay most or all of premiums. And for consumers that either don’t qualify for an Obamacare subsidy, or receive very little financial aid, higher deductibles are the simplest way to keep rates affordable.

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Impact Of  “Affordable Care Act” Legislation (ACA)

The ACA (also referred to as “Obamacare”) has required that all Metal plan policies offered through Exchanges must include 10 mandated essential health benefits. In addition to expected benefits such as prescriptions, office visits and emergency room coverage, maternity and mental illness are included in the required benefits. Many pediatric expenses that were previously subject to a deductible, are now fully covered.

2015 HSA contracts must adhere to the federal tax code, which means minimum deductibles are $1,300 per person and $2,600 per family. Maximum out-of-pocket costs are also capped at $6,450 per person and $12,900 per family. These amounts have been slightly increased from 2014 levels. There is also a maximum contribution limit which is $3.350 and $6,650 (single/family).

The HDHP

You must be covered by a High Deductible Health Plan (HDHP) to be able to take advantage of HSAs. An HDHP generally costs less than what traditional health care coverage costs, so the money that you save on insurance can therefore be put into the Health Savings Account. However, you can own an HDHP without creating the optional side investment account. This would be quite common if you rarely (or never) incur medical, dental or vision expenses.

Many Ohio insurance companies offer HSAs.  Anthem, Medical Mutual, HealthSpan, and UnitedHealthCare are often be the best options while  Humana and Aetna are also companies to consider. It’s not uncommon for one carrier to be extremely competitive in one portion of the state, but have high prices in another. Also, certain carriers, such as HealthSpan, SummaCare and Premier simply don’t offer plans in every county.

You may also have a “grandfathered” contract, which means it was issued in 2010 (or earlier) and does not meet many of the new legislative requirements. However, they often are significantly less expensive than applying for a new policy, and more network doctors and facilities are available. But if you wish, each year, during Open Enrollment, you may exchange them for a different plan and/or company.

What Is a “High Deductible Health Plan” (HDHP)?

   
As mentioned, the HDHP is a must. Sometimes referred to as a “catastrophic” health insurance plan, an HDHP is an inexpensive health insurance plan that generally doesn’t pay for the first several thousand dollars of health care expenses  (i.e., your “deductible”) but will generally cover you after that .  Of course, your HSA is available to help  pay for the expenses your plan does not cover. A wide range of deductibles is available…generally between $1500 and $10,000.

How can I get a Health Savings Account?

Ohio residents can visit utilize our website for a  free quote with no cost or obligation. (Out-of-state residents can visit http://www.majormedicalhealth.com ) These are two of the most comprehensive health insurance websites available to the public and will provide the latest prices, information, and Marketplace-related updates. Each year, contribution requirements change, and we keep you updated on minimum and maximum requirements.

What Are Some Of The Most Popular Options?

With the passage of the “Affordable Care Act” (ACA), these types of policies must now meet additional guidelines and contain 1o “essential benefits.” They also must be approved as a qualified contract so the proper tax deductions are considered legal. We have listed below several contracts that are both popular and affordable:

HealthSpanOne 6000

HealthSpanOne 4000-70

HealthSpanOne 3000

Anthem Pathway X PPO 6000

Anthem Pathway X PPO 2500/10%

Medical Mutual Market 6000

Medical Mutual Market 4000

NOTE: All of these options are ideal if you own your own small business. Self-employed health insurance options that are both economical and easy to understand are sometimes hard to find. These types of contract satisfy both requirements, including eliminating some tax dollars.

What Is The Cost?
An HSA is not actually a tangible product you purchase; it’s an optional savings account add-on into which you can deposit money on a tax-preferred basis.  The only policy you buy is a High Deductible Health Plan, an inexpensive plan that will cover you should your medical expenses exceed the funds you have in your contract.

 

UPDATES:

November 2011 – HSAs are still popular. Medical Mutual, Anthem and UnitedHealthCare are still the best options in the state.

October 2014 – Yes…They are still popular! For 2015, HealthSpan and Medical Mutual will offer very competitive Marketplace plans. The higher deductibles are still the most popular option and all tax advantages are still in place.

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One Response

  1. Jeff Palsgrove says:

    I like the Anthem plan you mentioned since it has just one family deductible. The Aetna plan has two deductibles.