Indiana Health Savings Accounts (HSA) Quotes And Information
What Is An HSA?
Indiana Health Savings Accounts are an affordable alternative to conventional medical coverage. The Medicare Reform Act of 2003 created these contracts, and they have reduced consumer’s premiums ever since that date. It is a policy that allows you to pay for medical expenses, and also save for additional medical, dental and vision expenses in a tax-free account. There are also many additional items that can be purchased with IRS-qualified tax-free dollars. Yourself, spouse, and dependents are eligible, under Section 213(d) of the Internal Revenue Code. Listed below, are many of the most popular allowed expenses:
Birth control (prescription only)
Braille books and magazines
Doctor visits and fees
Guide dog and other service animals
Lab Fees (and x-rays)
Pregnancy test kit
Prenatal and postnatal treatment
Weight loss programs
You can be single, married, or married with dependents, and still be eligible. When you reach age 65, you still own all of the money in your account. Although at that time, you can no longer make contributions, you can still utilize the policy. And, you can deposit money into another account, if the owner is under age 65. You can also use the funds to help pay for out-of-pocket expenses from your Medicare coverage and/or Medicare Advantage or Medigap plan. However, once Medicare-eligible, additional deposits are not permitted.
What About Unused Funds?
Funds remaining in the account at the end of the year continue to be invested and are not lost. At any time you can take these funds out of the account. You can also transfer your money to a different contract. If you terminate the policy, any money left over is yours to keep (you will not lose it) and 100% of your deposits are tax-deductible. If you have reached age 55, an additional $1,000 of “catch-up contributions” may be deposited. The deadline is April 15th of the following tax year.
You are not only the owner, but the main decision-maker as well. You can be either conservative or aggressive regarding how your funds are invested. Since interest rates have remained low for many years, electing the “fixed” rate of return will be very safe, although the growth will be nominal. Since a substantial amount of money is not likely to be kept in the account, the safer fixed option is the most popular, since it is FDIC-insured.
Electing the “mutual fund” option is more aggressive, and may yield higher returns. But you can also lose your principal, and the accumulated fund balance will be subject to market volatility. If your risk tolerance is low, the fixed option should be chosen. Interest rates can fluctuate, depending upon market conditions.
Insurance premiums reduce, and the owner of the account becomes much more involved in their healthcare decisions. Once you have met your yearly deductible, qualified medical expenses are paid by the insurer. Before you enroll in an HSA, you must first be covered under a High Deductible Health Plan (HDHP). Since there are many options to choose from, we help you find the best choice for your needs. Most policies are not considered “qualified.” Therefore, you can not choose a traditional copay plan to act as an HDHP, since there will be notax deduction of medical, vision, or dental expenses.
What Are The Least Expensive HSA Plans In Indiana?
For 2020, the policies with the lowest premium are listed below:
CareSource Marketplace HSA Eligible Bronze
Ambetter Essential Care 2 HSA
Note: Additional plans from many carriers are offered as group contracts through small and large employers.
Current HSA Rates In Indiana
Monthly rates illustrated below are for Marion County (Indianapolis area). Cost and availability will vary, depending upon the county.
40-year-old with $30,000 household income
$195 – Ambetter Essential Care 2 HSA
$204 – CareSource Marketplace HSA Eligible Bronze
50-year-old with $40,000 household income
$313 – Ambetter Essential Care 2 HSA
$325 – CareSource Marketplace HSA Eligible Bronze
55-year-old married couple with $50,000 household income
$371 – Ambetter Essential Care 2 HSA
$403 – CareSource Marketplace HSA Eligible Bronze
35-year-old married couple with two children and $70,000 household income
$503 – Ambetter Essential Care 2 HSA
$531 – CareSource Marketplace HSA Eligible Bronze
50-year-old married couple with two children and $70,000 household income
$492 – Ambetter Essential Care 2 HSA
$529 – CareSource Marketplace HSA Eligible Bronze
What Is An HDHP?
An HDHP is a catastrophic health plan that typically features a high deductible, often between $3,000 and $6,900. Medical expenses are usually covered between 80% and 100% after the deductible is met. Maximum out-of-pocket expenses are often less with an HSA because of the possibility of no coinsurance after the deductible.
You can purchase a single policy with a deductible as low as $1,400 and $2,800 for a family. But usually, the higher premium does not justify the extra cost of coverage. NOTE: Remember that you can only deduct medical expenses for a dependent on your tax return. If they file their own tax return, legitimate expenses you spend on them can not be used with your HSA. Once they file their own tax return, they can apply for their own healthcare policy.
Preventive coverage is not subject to the major medical deductible and “Network negotiated discounts” will reduce your out-of-pocket costs. Sometimes these discounts can be as much as 70%-80% (often with lab tests and X-rays). Anthem and UnitedHealthcare often have the best Group prices, although Humana sneaks into contention in certain areas. However, private plans are not available through all companies, although in 2021, more options may become available.
What Are The Tax Benefits?
Contributions to an HSA are deductible from your federal gross income (subject to IRS requirements). Interest on any earnings inside the plan accumulate tax-deferred. Any withdraw for a “qualified medical expense” is not subject to federal income tax. A list of qualified medical expenses can be provided if you request it. For 2019, A family can contribute up to $7,000 in a given year while the individual cap is $3,500.
If you are age 55 or over, a special additional “catch-up” contribution of $1,000 is allowed. Also, the 2019 maximum out-of-pocket expense is capped at $6,750 per individual and $13,500 per family. Deductibles, copayments, and coinsurance count towards this amount. However, the premium payments made to the insurer are not applied to the maximum amount. And any funds that are used for non-qualified expenses will be subject to a 20% penalty.
NOTE: After you reach age 65, funds that have accumulated inside the account are regularly taxed when you withdraw them. But, there is no penalty if you spend the money on items non-healthcare expenses. So although additional contributions can not be made, your HSA has become an IRA. (Not a Roth IRA, but a conventional one)
Can I Have An HSA And An IRA?
Yes. Owning both types of plans are allowed and also very popular. In fact we strongly encourage that you take advantage of both. Keep in mind that withdrawing funds from an HSA is much simpler than withdrawing funds from an IRA. Of course, you will have many more investment choices with the IRA, including the option to create accounts with Ameritrade, Fidelity, and Charles Schwab. Purchasing stocks and mutual funds is inexpensive, although transactions costs should always be monitored.
Are HSAs Available Through An Employer?
Yes. And often, depending on the size and profitibility of the employer, contributions may be made into your account to be used for qualified medical, dental, and vision expenses. Just like a private plan, the employee uses the savings account to pay for qualified expenses. Once the deductible has been met, the policy begins to pay for additional medical expenses. Unused funds will also not be lost, and will be available the following year.
The “Anthem ByDesign” is a High Deductible Health Plan offered by many Indiana companies to their employees. Premiums are fixed, referrals are not required, and preventative benefits are covered at 100%. Treatment at non-network providers is covered, but with higher out-of-pocket expenses. Deductible options are $1,000-$5,000 (individual), and $2,000-$10,000 (family). Coinsurance levels are 80%, 90%, and 100%. Out-of-pocket maximum options are $1,000-$5,000 (single) and $2,000-$10,000 (family).
How Do I Get My Free Quote?
Very easily! Simply provide your zip code in the “Get Free Quotes” box at the top of the page. You will then be able to compare your options. You can also speak to a live person by calling us at (888) 513 6446. We’re Indiana’s HSA experts and we provide completely unbiased advice that helps you pick out the right plan. Additional information on applying is here.
Are Dental And Vision Expenses Considered “Qualified” Expenses?
If the IRS considers these expenses “deductible,” then they are “qualified.” Most insurance carriers issue a debit card that you can use exclusively for your medical, dental, and vision qualified expenses. Common allowed dental expenses include teeth cleaning, sealants, fluoride treatment, models and molds, x-rays, routine checkups, fillings, dentures, extractions, and braces. The money you spend is clearly documented in a year-end statement.
You can also view your account information online at any time. Generally, you pay a very small (or no) amount at the time you are treated. Once the claim has been submitted, and the negotiated fee has been calculated, you are sent a bill for the reduced amount. Since vision insurance is often limited, there are many eligible out-of-pocket costs that can be deducted. Included are exams, glasses, contact lenses, and other office visit charges.
Do The Recent Changes In Reform Legislation Affect HSAs?
The last significant change was to no longer allow over-the-counter medicines as a qualified expense. These costs are typically quite low so the impact is nominal. The Supreme Court ruling five years ago does not impact HSAs in any significant way. These types of plans will continue to be a popular alternative to more expensive health insurance policies that are not eligible for subsidies. Any Trump Administration changes should be quite beneficial. Increased deductible amounts and a one-time refundable tax credit for contributions have been discussed. Transfer of limited retirement account funds may also occur.
Who Controls The Money That Is Invested In The Policy?
You do! How the money is invested is your decision. HSAs utilize the same type of investments as IRAs. Stocks, bonds, mutual funds and certificate of deposits are the most common types of investments. Utilizing a “fixed interest” option is the safest method of protecting your funds. Although the rate of return will be small, the safety of your investment should not be a concern. If interest rates increase, your rate of return will also increase.
We realize that the same shoe does not fit everyone’s needs. We help you determine which type of medical coverage is best for you. And you can easily apply for coverage through this website without paying any fees. Indiana Marketplace HSA plans will save you money and help reduce your taxes. You can also choose policies that are not dependent on the government for a federal subsidy.
State Of Indiana Employees HSA Options
Health Savings Accounts are available to state employees. By using employer code 100366, an account can be opened online (at HSA Authority) by sunbitting an application. A welcome letter and debit card (if requested) will be promptly sent. Old National Bank is the financial institution that is used. Since 2004, they have been administering accounts for groups and individuals in all states.
This year, the Hoosier State contributes 39% of the CDHP (Consumer-Driven Health Plan) deductible. Amounts can slightly vary, depending which plan you are enrolled in. Plans, initial contribution, and employer annual contribution are shown below:
Wellness HSA (Single) – $625.56 and $1,251.12
Wellness HSA (Family) – $1,251.12 and $2,502.24
HSA 1 (Single) – $500.76 and $1,001.52
HSA 2 (Single) – $299.52 and $599.04
HSA 1 (Family) – $1,001.52 and $2,003.04
HSA 2 (Family) – $599.04 and $1,198.08
CDHP (Consumer Directed Health Plan) Rates For State Employees
Bi-weekly single employee rate – $68.64
Bi-weekly family employee rate – $138.80
Annual employer single contribution – $1,001.52
Annual employer family contribution – $2,003.04
Bi-weekly single employee rate – $159.20
Bi-weekly family employee rate – $391.82
Annual employer single contribution – $599.04
Annual employer family contribution – $1,198.08