When you call any saving scheme as healthy savings, then it should mandatorily supplement the individual’s present day insurance coverage. However, this is not observed in most HSAs. HSAs simply cover your medical expenses but not your health insurance. This scheme compensates your medical bills including surgery bills, hospitalization bills, consultation fees, etc. This scheme helps to free from tax. Therefore, there are two options for depositing the money for HSA depending on the plan that you choose where you can either pay your premium directly or your employer can deduct the premium amount from your salary and pay for your medical insurance. Some HSAs like professional indemnity insurance even pay out interests for the paid premium amounts when you don’t expect the medical expenses to be compensated. With HSA, medical expenses are paid directly without reimbursements. The payments are done through COBRA Health Insurance Company. There is availability for some long term medical or healthcare policies suitable for all age groups especially senior citizens. There is an option for paying out policyholders when there is a situation of unemployment when they hold active HSA accounts. Everyone having good salary credits and self employed individuals whose income is high those do not get affected if high deductions are done for health insurance plan.
How It Works
Premium deposit: As mentioned earlier, the premium can be deposited directly by the individual or can be done by the employer in the individual’s HSA account. The insurance providing company can provide you the details of your HSA account.
Just as you save your money in the bank, your premium amount gets accumulated in your HSA account for which tax is not imposed. Sometimes, you might get interest for the paid premium amount. This happens when you don’t break your account for medical emergencies, meaning you never used your medical insurance for compensating your medical expenses.
