President Obama announced on Thursday, November 14, 2013 that he will allow insurance companies to offer non-ACA-compliant health insurance plans in 2014. This announcement came in response to increasing public outcry over the millions of Americans receiving cancellation notices from their insurers.
This change means that insurance companies are being given the option to continue plans that they might otherwise have cancelled. Unfortunately, because this is all happening so quickly, and so close to the end of the year, it makes it difficult to know what to do and how to proceed.
The best way to deal with this new development is to get in touch with us. We have been working closely with insurance companies to determine which plans are going to be offered in 2014, which ones are being cancelled, and what is the best option for you. You can contact us for an instant quote or call us at 1-866-749-2039 with your questions. We are here and happy to help. Now, back to our regularly scheduled blog post…
Missed Deadline Could Cost You over $2,000 in Additional Taxes
Anyone with an HSA-qualified high-deductible health insurance plan is allowed to set up a health savings account and deposit tax-deductible funds into it every year. That money can be used in the future to pay for medical expenses, tax-free. In the meantime, the money can be invested just like an IRA, in the investment vehicle of your choice.
In 2013, a family can contribute as much as $6,450 into their HSA. Anyone over age 55 can contribute an extra $1,000 beyond that. For many people, their HSA contribution will lower their April 15 tax bill by over $2,000.
But to make a contribution for 2013, you must have an HSA-qualified plan in effect no later than December 1. To make sure this happens:
- Request an effective date no later than December 1 when you submit your application.
- Apply as soon as possible.
Keep in mind that you have until April 15, 2014, to fully fund your account for 2013 and receive your tax credits for the 2013 tax year. In making this decision, you can save thousands of dollars on your tax return.
Some carriers have already stopped accepting applications for December 1 effective dates. Here is a list of most of the major carriers and their deadlines.
The Other December Deadline—December 31
Although the most important deadline in my opinion is the December 1 deadline for 2013 HSA-qualified health plans, if a 2013 has plan is not feasible for you there is another important deadline in December.
If you do not qualify for a health insurance subsidy and want to delay enrolling in an Affordable Care Act-compliant health plan, you must have a policy that goes into effect prior to January 1. The actual deadlines vary depending on where you live and what carriers are available. You can visit our 2013 Deadlines page for specific information about your state.
Urgent! Don’t Delay
A 2013 HSA-compatible plan must be effective no later than December 1 for the contributions to your HSA to help reduce your 2013 Modified Adjustable Gross Income (MAGI). Even if the insurance company does not complete the underwriting process until after December 1, most will still honor your requested December 1 effective date. But only a few carriers will accept applications until the end of November, so you should act now if you want to take advantage of this tax break and have the most options to choose from.
You can get instant quotes and apply online at www.HSAforAmerica.com, or give us a call at 1-866-749-2039.
Putting aside money in your HSA will not only immediately lower your taxes, but it will be a fund that can grow tax-deferred and potentially add to your retirement account. Having money in an HSA also gives you more health care freedom—to see specialists, get second opinions, see a doctor outside your network, or choose an alternative treatment that is not covered by your insurance company.
Wiley Long is President of HSA for America, and a passionate advocate for consumer-based solutions that will improve price transparency and lower health insurance and medical costs for people purchasing individual and family health insurance plans.