Louisiana is joining other states where state workers will be able to choose HSA-qualified health plans for 2013. That could save from $300 up to $1,000 per individual in health insurance premiums. By pairing a high-deductible plan with a Health Savings Account (HSA), state workers could pay for their health care that’s not covered by the plan with pre-tax dollars – up to $775 of that could come from the state’s budget.
This will be one of four health care options for state workers under the Office of Group Benefits. This agency is responsible for providing health insurance and life insurance coverage to state workers and state retirees. They say taxpayers will also save about $900 per year per state employee because of the savings obtained from the reduced premiums of high-deductible plans. As long as state employees need little health care, they could benefit from lower premiums, too.
Why select a Health Savings Account plan?
If you are pretty healthy, selecting a plan with a high deductible and pairing it with an HSA can get you lower premiums, too. Compared to traditional co-pay plans, the premiums of high-deductible policies can be up to 40 percent lower. If you can put the money that you save on premiums in your HSA, it can grow with tax-free earnings. If you contribute to your HSA, you can claim that money as a tax deduction when you file. If your employer contributes, that’s pre-tax money. Both you and your employer can contribute to a single HSA – just be careful not to exceed the maximum annual contribution permitted.
If you have an HSA-qualified plan for self-coverage, you can claim a deduction of up to $3,250 ($6,450 for family coverage) next year. That’s the maximum amount that you can deposit in your HSA. If you exceed that, you’ll get a nasty penalty.
What happens to HSA money you don’t need for health care? The money rolls over to the next year and can continue growing with tax-free earnings. Another great thing about Health Savings Accounts is that they are completely portable. No matter what happens to your employment, even if you quit your job, you will not lose your HSA funds. Even if your employer made contributions, that money is yours to keep. By January 2013, state workers will receive a $200 contribution from the state to their Health Savings Account.
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.