HSA and High Deductible Health Plans (HDHP) can offer some great benefits to small business owners while protecting the family with a major medical policy. The HDHP offer some benefits they are usually have 100/0 coinsurance, and they have one deductible for an individual or a family (usually 2x individual deductible). With a family deductible when the families medical expenses reach the deductible (single member or shared among a few family members) the insurance company will cover over that amount in network. The one thing that is different on HDHP they do not have a set copay, or set prescription copay. All the doctors visit expenses and prescriptions count towards your deductible. Some people really like knowing that they have a cap annually on the plans out of pocket.
HSA – (Health Saving Account) is a separate bank account for medical, dental, prescription, and vision expenses to be paid through. The HSA account the any money placed in the account will roll over year to year. You can fund it annually or fund it as you need it. In 2013, an individual can place up to $3,250 into the account, and a family can place up to $6,450 annually. The money placed in there is similar to a contribution to an IRA, where it reduces your income by that amount. The money grows tax free and can be used for valid HSA expenses. Many people and CPA’s like these types of accounts. Check with your CPA/Tax person to see if this makes sense for your specific situation.