Health Care News

Kaiser Officially Acquires Group Health

It’s been a long process (initiated in Late 2015), but on February 1, 2017, Kaiser officially acquired Group Health with the final stamp of approval coming from Washington State... Read more

It’s been a long process (initiated in Late 2015), but on February 1, 2017, Kaiser officially acquired Group Health with the final stamp of approval coming from Washington State’s Office of the Insurance Commissioner.

Kaiser and Group Health share many values when it comes to delivering healthcare – both heavily leaning on an HMO/integrated health care model. With the acquisition, Kaiser added 651,000 Group Health Members, now serving a total 11.3 million across eight states and the District of Columbia.

As part of the deal, Kaiser has pledged to invest one billion dollars over the next decade to expand and modernize facilities and technologies to improve care and service. Immediately, the most noticeable change users will experience simply is in the name – speculated to take place in early March. You’ll begin seeing ‘Kaiser Permanente” plastered on the side of the 25 primary care clinics, three urgent and four outpatient surgery centers in Washington State. Group Health collateral will be gradually phased out as well. No immediate changes to operations, health care plans or care is expected – at least for the duration of 2017.

For most Washingtonians, Kaiser is only known by reputation. Kaiser does have medical centers in Southwestern Washington, but this acquisition gives them a substantial footprint in Washington State, specifically along Puget Sound’s I-5 corridor. Not much is known about what changes Kaiser is expected to impart upon Group Health’s Infrastructure and health care delivery system – both sides have been quite mum on the topic. However, from our standpoint, from the health insurance perspective, there are a few differences between the two organization’s health care plans and operations that we are anxiously waiting to see how they pan out:

Alternative Care – While you won’t find a Group Health or Kaiser HMO plan offering containing coverage for Naturopathic care, those on Group Health plans may have become accustomed to GHC’s adequate coverage and network of alternative medical providers – specifically, chiropractors and acupuncturists. Kaiser doesn’t share the same level of enthusiasm for alternative care – it will be interesting to see if they budge on this and what will happen with those provider’s contacts.

Access PPO plans – This really is the big question from our standpoint. Group Health offers true PPO plans that utilize the First Choice Health Network, which is the largest network of physicians in Washington State. Plans on both the individual and group sides have garnered significant market share over the past few years. How will Kaiser approach these large PPO offerings? Will they scale them back? Flush them down the toilet? Keep them in place? It will be late April/early May when filings are due for 2018 that we will likely get our first glimpse into what the future holds for these products.

Infrastructure – True to any organization, across any industry, any time a local business gets gobbled up by a large conglomerate, there is a moment of pause and wonder what will be the ramifications to their customer service model? What sort of claims and billing support will there be? When I have a problem am I now going to have contact a Call Center in California (Kaiser is California-based)? What about this online patient portal I’ve been using? How will the overall user experience be impacted?

These are interesting times in the world of health care delivery. This acquisition is sure to directly impact on our local system – Group Health has developed a substantial homegrown presence in Washington State. To learn more, see the link below that will direct you to Group Health’s press release.

“Kaiser Permanente, a National Leader in Integrated Health Care and Coverage, Completes Acquisition of Group Health Cooperative in Washington State.” https://www.ghc.org/html/public/news/2017-02-01-kaiser?utmcampaign=17kpacq&utmsource=direm&utmmedium=email&utm_content=pd. February 1, 2017.

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Your 2016 and 2017 HSA Contribution Maximums

It’s tax season! Many HSA utilizers make a one-time annual contribution at this time. Here are your contribution limits for 2016! And, while we’re at it, let’s go ahead and t... Read more

It’s tax season! Many HSA utilizers make a one-time annual contribution at this time. Here are your contribution limits for 2016! And, while we’re at it, let’s go ahead and throw in 2017 as well! The contribution limit for an individual went up $50 from 2016 to 2017 – all other contribution amounts and plan minimums remain unchanged.

2016 contribution limits (employer and individual combined)
• Maximum contribution limit for individuals - $3,350
• Maximum contribution limit for families - $6,750
• Age 55 catch-up contributions - $1,000

2016 Minimum HDHP limits
• Minimum deductible for self-only coverage - $1,300
• Minimum deductible for family coverage - $2,600
• Maximum out-of-pocket expenses for individual - $6,550
• Maximum out-of-pocket expenses for family - $13,100

2017 contribution limits (employer and individual combined)
• Maximum contribution limit for individuals - $3,400
• Maximum contribution limit for families - $6,750
• Age 55 catch-up contributions - $1,000

2017 Minimum HDHP limits
• Minimum deductible for self-only coverage - $1,300
• Minimum deductible for family coverage - $2,600
• Maximum out-of-pocket expenses for individual - $6,550
• Maximum out-of-pocket expenses for family - $13,100

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Your Individual Health Insurance Options Outside of Open Enrollment

With the individual health insurance market transitioning to open enrollment periods (ended on January 31, 2017), a common misconception has developed in that potential ins... Read more

With the individual health insurance market transitioning to open enrollment periods (ended on January 31, 2017), a common misconception has developed in that potential insureds believe they don’t have an opportunity to enroll into any sort of individual health insurance plan at this time.

Some may find that they qualify for a special enrollment period if a qualifying life event has occurred.  Events include:

-          Getting married or divorced

-          Having a baby, adopting a child, placing a child for adoption or foster care

-          Moving into a new state, gaining citizenship or being released from incarceration

-          Or most commonly, the following, including losing employer based  coverage via job         change/loss/retirement, COBRA expiration, losing eligibility for state programs or turning 26 and losing coverage from parent’s plan

It is worth noting that if you have a qualifying event, you have a sixty day window from date of event to complete enrollment into an individual plan.  Additionally, most carriers (as well as state exchange) do require a “proof of loss” or “proof of event” letter demonstrating the qualifying life event.

The Healthplanfinder (state exchange) periodically grants special enrollment periods for certain groups of people to take advantage of premium subsidies.  So far, special enrollment periods have permeated for those who were unable to complete their application due to technical errors during open enrollment (ended May 1st), folks currently enrolled in COBRA (ended June 30) and currently those who had their domestic partnership transitioned into a marriage (ending August 31st).

For those who do not fall into one of the aforementioned categories, your options are more limited outside of open enrollment.  The good news is that our office can help you enroll in a Short Term Medical plan.  These plans are specifically designed to bridge the gap between richer plans, offering peace of mind that coverage is in place and providing cost sharing benefits.  Give us a call for more information about these plans.

One of the major adopted provisions of Obamacare is expanded Medicaid.  In Washington State, a person or family that qualifies can enroll into Washington Apple Health (state’s Medicaid program) anytime throughout the year. 

Group plans can still be shopped anytime throughout the year.  Some carriers do have a uniform renewal period which does not affect a group’s ability to enroll into the plan – just when their open enrollment period will be.   Small groups can be put together with as few as two employees.

As an independent broker, our office can present you will all of your health insurance options for individuals and small business owners, inside and outside of open enrollment.

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Donald Trump’s plan to reform Healthcare and "make it great"

Donald Trump’s plan to reform Healthcare and "make it great" While Donald Trump’s main initiatives have been widely discussed, mocked, opposed and virtually dissected... Read more

Donald Trump’s plan to reform Healthcare and "make it great"

While Donald Trump’s main initiatives have been widely discussed, mocked, opposed and virtually dissected from every angle, the issue of Healthcare has been relatively mum, comparatively.  Like his right wing contemporaries, presumptive Republican Presidential Nominee, Donald Trump has taken the position to repeal and replace healthcare reform.  Not surprisingly, Donald Trump favors a healthcare system that emphasizes free market principles, provider transparency and decentralized decision-making.[i]

On his website, Trump presents a seven point model to improve our healthcare industry and – dare I say, “make it great!”  His vision closely represents the pre-ObamaCare world, with a few added twists.  By applying free market practices, enabling carriers to sell across state lines (would require law modification), and removing barriers for entry for pharmaceutical companies to enter the market, increased competition will lower costs and broaden healthcare access.

Trump spends some time hitting on some changes valued by both sides of the spectrum – the need for transparency from all healthcare providers and calling for substantial improvement in our mental health programs and institutions in this country.  However, he presents a few wrinkles in healthcare reform that differ significantly from what has been presented by the other presidential hopefuls and our current Speaker of the House’s (it is widely speculated that Ryan and Trump will forge their relationship over healthcare reform – more on that later) .  Most notably:

·         Allow individuals to fully deduct health insurance premium payments – Businesses are allowed to     write off the premiums, so why wouldn’t Congress allow individuals to do the same?

·         Remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products

·         Enforcing immigration laws that would relieve healthcare cost pressures on state and local governments

While some candidates went to great lengths to explain how their reforms will be funded and rolled out (see Bernie Sander’s “Medicare for All”), Mr. Trump’s presentation doesn’t present many statistics or steps to be taken.  His focus seems to mostly singular in the sense that creating a platform for competition will lower healthcare costs and improve satisfaction for Americans.  He does recognize that a repeal of ObamaCare and his outlined reforms are simply the starting point. 

To read his healthcare reform position in its entirety, go here.

 

 



[i] Trump, Donald. "Healthcare Reform to Make America Great Again." Make America Great Again. Web. 18 July 2016.

 

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Explanation of ACA taxes for Employers

For Employers, there are three fees associated with the deployment of Obamacare.  What we are finding is that most carriers have these fees and taxes embedded into the rate... Read more

For Employers, there are three fees associated with the deployment of Obamacare.  What we are finding is that most carriers have these fees and taxes embedded into the rates, so in some cases the employer may not be aware they exist.  However, occasionally, you will actually see separate line items on your invoice.

The PCORI Fee affects both fully-insured and self-funded group plans.  The fee funds research that evaluates and compares health outcomes, clinical effectiveness, risks and benefits of medical treatments.  It is an annual fee that is indexed against medical costs.  The fee for plans ending on or after October 1, 2014 and before October 1, 2015 is $2.08 per covered life, a slightly higher PCORI fee than the previous plan year.  As in previous years, health insurance carriers will pay the PCORI fee on behalf of fully-insured group health plans.  Plan sponsors of self-insured group health plans, including some HRAs and health FSAs, must complete the filing process themselves using IRS Form 720.

Under the Affordable Care Act, group health plans must pay an annual fee to fund the Transitional Reinsurance Program, designed to stabilize premiums in the individual health insurance market from 2014-2016.  For 2014, the Transitional Reinsurance Fee is $5.25 per covered life per month and in 2015, the fee drops to $3.67 per member, per month.

The Insurer Fee affects fully insured customers only.  The fee will help fund tax subsidies for individuals and families who purchase health insurance through an exchange.   Industry sources estimate this fee will be around 3% for 2015.

For more information related to the fee schedule, fee payments and exclusions visit:

http://www.uhc.com/live/uhc_com/Assets/Documents/TaxesFees.pdf

 

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FAQ: What is self-employment tax?

Self-employment tax is a tax combining Social Security and Medicare taxes due on net self-employment income.  It is similar to Social Security and Medicare taxes withheld f... Read more

Self-employment tax is a tax combining Social Security and Medicare taxes due on net self-employment income.  It is similar to Social Security and Medicare taxes withheld from pay of most wage earners.

So how do you figure your self-employment (SE) tax?  Using form 1040 and Schedule SE, you will find instructions for calculating and claiming the deduction and how this figures into your adjusted gross income.  This calculation affects only your income tax – it does not affect either your net earnings from self-employment.

So how does this relate to health insurance?  One of the moving parts of Obamacare health plans involve a handful of deductions that one can include on their health insurance application to maximize their tax credit.  This calculated deduction (SE tax) can be used by self-employed individuals to lower the gross income calculation, thus increasing the potential tax credits availalble through the state exchange to help lower health premiums.

For clarity, and verification on numerical values, we advise phoning your accountant.

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Health claim denied? Here's what you need to know.

Health Insurance denials can happen for a number of reasons.  A simple cause can be a billing error from the provider's office.  If the claim is submitted using the wrong t... Read more

Health Insurance denials can happen for a number of reasons.  A simple cause can be a billing error from the provider's office.  If the claim is submitted using the wrong treatment or diagnostic code, the claim can be denied.  More serious reasons can involve treatments considered "experimental" or "pre-existing".  Both of these reasons can be appealed if you feel the insurance company's decision is wrong.

If your healthcare claim is denied, you have the right to appeal.  Health Insurance carriers are required to provide an appeals process.  Typically there are a few levels of appeal, each moving more 'independent' by involving impartial medical professionals.  The Patient's Bill of Rights also provides an independent third-party review of your appeal, if the standard appeals process is unsuccessful.

Washington Health Insurance Agency provides assistance through the appeals process, by walking their health insurance clients through the steps, carefully tracking the appeal deadlines, recommending the best supporting documents, and even participating in the appeal discussion board via conference call on behalf of their clients.

The most important thing to remember is that if you feel the denial is wrong, you have to appeal.  Many people just assume there is nothing they can do.  The New York Times recently reported a story about this very point.  

Remember, if you have the right Health Insurance Agent, you don't have to go through the appeal process alone.

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Health Insurance Tax Credit for Small Business

Small Business Owners may be able to claim a new credit on their tax returns if they pay employee insurance premiums. The credit, available through the Patient Protec... Read more

Small Business Owners may be able to claim a new credit on their tax returns if they pay employee insurance premiums.

The credit, available through the Patient Protection and Affordable Care Act, is intended to:

1.   Give small employers a tax break if they pay at least half the cost of single coverage for their employees on the group health plan.

2.   Encourage small employers to offer health insurance for the first time or maintain the coverage they currently have.

 

Who is eligible?

Employers with fewer than 25 full-time employees for the tax year and less than $50,000 in average annual wages per full-time employee, may be eligible for the tax credit if the employer pays at least 50 percent of the premium cost of health insurance coverage. Additional requirements and rules apply. Refer to the IRS website for more information. The IRS has also issued a “Three Simple Steps” guide to assist employers in determining their eligibility.

*Use this calculator from United Healthcare to help you determine your potential credit:

http://www.uhc.com/live/uhc_com/Assets/Documents/taxtool.html

How much is the credit?

To achieve the maximum credit of 35 percent of employer-paid premiums paid in 2010 through 2013, an employer must have 10 or fewer full-time employees with an average annual full-time-equivalent wage of $25,000 or less. Those employers who employ between 11 and 25 full-time employees and/or with average wages in excess of $25,000 but less than $50,000 may still qualify for a lesser credit. Different credit amounts apply to tax-exempt small businesses.

How will the credit change in 2014?

Beginning in 2014, the tax credit increases to a maximum of 50 percent and is available for the two-consecutive-taxable year period beginning with the first taxable year in which the employer offers a qualified health plan to its employees through an exchange.

How are business owners (and their family members) who are employees counted?

Business owners and their family members are not counted when determining the number of full-time employees, the amount of average annual wages or premiums paid with respect to the credit. See the IRS website for further information including a description of a “business owner” and “family member.”

How does this affect payment of health insurance premiums?

It doesn’t. The credit is claimed on the employer’s tax return. The employer must pay the premiums during the year and claim the credit on his/her annual income tax return.

 

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Health Savings Accounts (HSA) changes for 2014

A HSA is a tax-advantaged medical savings account that is available to American tax payers who are concurrently enrolled in a high deductible health plan (HDHP).[1]  Deposi... Read more

A HSA is a tax-advantaged medical savings account that is available to American tax payers who are concurrently enrolled in a high deductible health plan (HDHP).[1]  Deposits into these accounts are not subject to payroll taxes and can be withdrawn without penalty for any qualifying medical expense.  They also have a distinct advantage over Flexible Spending Accounts (FSA) because any deposits will accumulate and roll over year to year, where FSA’s require you use the funds that calendar year – the “use it, or lose it” approach.

Employers and individuals can contribute to these personally owned savings accounts and the IRS adjusts maximum contribution limits pretty much annually, with the exception of 2011 (program started under the Bush Administration in 2004).

With health care reform there was some speculation that HSA’s would be going away – that’s not the case.  They are here to stay!  However, there are a handful of characteristics of these accounts for 2014 that need to be noted.

2014 contribution limits (employer and individual combined)[2]

·         Maximum contribution limit for individuals - $3,300

·         Maximum contribution limit for families - $6,500

·         Age 55 catch-up contributions - $1,000

Minimum HDHP limits

·         Minimum deductible for self-only coverage - $1,250

·         Minimum deductible for family coverage - $2,500

·         Maximum out-of-pocket expenses for individual - $6,350

·         Maximum out-of-pocket expenses for family - $12,700

Coverage of Adult Children

While the Affordable Care Act has allowed parents to keep their children on their health policies up to age 26, the IRS has not changed their definition of dependent coverage.  If an account holder can’t claim a child as a dependent on their tax returns, then they can’t spend HSA funds on the child.  The child is qualified if:

·         Has the same principal place of abode as the covered employee for more than one-half               of the taxable year

·         Has not provided more than one-half of his/her own support during the taxable year

·         Is not yet 19 (or, if a student, not yet 24) at the end of the tax year or is permanently and                 totally disabled



[1] "Health Savings Accounts". Health401k.com. October 2013

[2] Miller, Stephen. “For 2014, Higher Limits for HSA Contributions, Out-of-Pocket Expenses.” www.shrm.org. October 2013

 

 

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Help with Calculating your Modified Adjusted Gross Income

  We’ve been getting a lot of questions about the income portion of the new health insurance application process.   Calculating your modified adjusted gross income do... Read more

 

We’ve been getting a lot of questions about the income portion of the new health insurance application process.   Calculating your modified adjusted gross income does not have to be a difficult process.  For many it is simply their gross wages before taxes.  Often you’ll have all the information you need on your 2012 tax return and a current bank statement.

Keep in mind tax credits are based upon your future estimated Modified Adjusted Gross Income for 2014. 

Here’s a list of the items you need to include[1]:

  • Wages
  • Salary
  • Tips
  • Self-employment income (business income minus expenses and self employment taxes)
  • Rental income (minus expenses)
  • Social Security payments (including Social Security disability payments*)
  • Alimony
  • Unemployment
  • Dividends, Capital Gains
  • Pension income

What not to include:

  • Child Support
  • Gifts
  • Supplemental Security Income*
  • Veterns' Disability Payments
  • Workers' Compensation
  • Proceeds from loans (e.g. student loans, personal bank loans, home equity loans)

 

*It is key to distinguish the differences between Social Security Payments, Social Security Disability Insurance and Supplemental Income Payments, which are all administered by the Social Security Administration.

Social Security expenditures provide income designed to keep Americans over age 65 above the Federal Poverty Level.  When you work and pay social security taxes, you earn “credits” toward your Social Security benefits.[2]  Your benefit payments are a direct result of how much you earned during your working career.  Higher lifetime earners will receive larger benefits.  Currently 96% of American workers are covered under Social Security.

Social Security Disability Insurance (SSDI or SSD) provides supplemental income to folks who are restricted physically of employment as a result of a disability.  These payments can be administered on a permanent or temporary basis, depending on the disability.

Supplemental Security Income (SSI) provides stipends to people who are low income and are either aged (65 or older), blind or disabled.   There are currently 8 million Americans receiving SSI.  The key distinction between SSI and SSD is that there is an income restriction for SSI.  Most SSI recipients are below an administratively-mandated income threshold, and indeed these individuals must in fact stay below that threshold to continue receiving SSI; but this is not the case with SSD.[3]  For this reason, SSI is omitted from inclusion when calculating your Modified Adjusted Gross Income.

As always, please don’t hesitate to call our office, 360-464-1622, for additional information on calculating your modified adjusted gross income.  Another great resource is the following link: https://www.healthcare.gov/what-income-and-household-information-do-i-provide-when-i-apply-for-marketplace-coverage/

IMPORTANT:  We are not accountants or tax professionals and the above information should not be considered tax advice.  The information above has been compiled from reliable sources (IRS, UC Berkeley Labor Center, etc) and shared with our clients as a courtesy.  Always confirm and verify information with your CPA or tax professional as it relates to your situation.

[1] http://www.healthcare.gov (October 29, 2013)

 

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Hillary for America – Focus on re-tooling and expanding the ACA

Hillary for America – Focus on re-tooling and expanding the ACA Hillary Clinton has a long track record of advocating for Universal Health Care, the CHIP program and ... Read more

Hillary for America – Focus on re-tooling and expanding the ACA

Hillary Clinton has a long track record of advocating for Universal Health Care, the CHIP program and bringing expanded care to rural areas.  The ACA undeniably has brought these things to the majority of the American people, especially with the expanded Medicaid program.  However, it is no secret that the ACA does have a number of issues that need to be addressed for it to be both sustainable and deliver quality affordable health care to Americans.  Democratic nominee, Hillary Clinton has made a pledge to patch a few of the holes in the ACA, while expanding on its principles.[i]

Hillary’s health care proposal reads more like a resume, then a reform piece.  As tenured as she is, for better or worse, there is a long list of health care transformations that she has been involved with.   As first lady, she was instrumental in lobbying for the creation of the Children’s Health Insurance Program (CHIP).  This program provides medical insurance for kids, whose families don’t qualify for medical assistance (non-Medicaid eligible) and cannot afford private health plans.  Her hopes are to continue expanding access to affordable health care to families.  Here are her main reforms:

·  Fix the “family glitch” – an glaring hole in the ACA where family members are prohibited from qualifying for tax credits if they are offered coverage by an employer

·  Support new incentives to encourage all states to expand Medicaid – currently, there are 19 that have not adopted the expansion[ii]

·  Slow the rise of prescription drugs, copays and out-of-pocket maximums

Mrs. Clinton has always been consistent with her stance on woman’s reproductive health care – access to emergency contraception, preventive care and legal abortion.  She has always remained true to Arkansas roots, by making sure that rural Americans have access to quality, affordable health care by federally funding rural health clinics and streamlining licensing for telemedicine.

She has made it clear she intends to furiously defend the Affordable Care Act against any opposition. 

In summary, the Hillary Care model is not much different than what is currently in place (albeit there has been discussion of bringing down the Medicare age to 55, offering a state run plan).  A few of the glaring consumer holes are addressed, but no real effort is put forth in describing how escalating premiums and out-of-pocket maximums are going to be curbed.  Expanding Medicaid into the 19 remaining states will no doubt bring down the uninsured rate significantly, making health care much more “Universal.”  It goes almost without saying that the ACA, as it stands, is not a sustainable model and with escalating premiums, more and more healthy folks will no doubt be forced to drop out, further pushing carriers out of the individual market.  It’ll be interesting to watch in the upcoming months if she elaborates on her plans to get the insurance carriers out of the red, while simultaneously stabilizing soaring premium costs.   



[i] Clinton, Hillary. “Health Care – Affordable health care is a basic human right.” Hillary for America.  Web. 19 August 2016.

[ii] Kaiser Family Foundation. “Status of State Action on the Medicaid Expansion Decision.” Kaiser Family Foundation. Web. 24 May 2016

 

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HSA Contribution Limits for 2015

Maximum contribution limits for 2015 are (these contributions are 100% tax deductible from gross income): Individual - $3350 Family - $6650 Also, in 2015 ... Read more

Maximum contribution limits for 2015 are (these contributions are 100% tax deductible from gross income):

Individual - $3350

Family - $6650

Also, in 2015 the minimum deductible amount has changed to $1,300 for self-only and $2,600 for a family.  The maximum out of pocket experienced a bit of a bump from 2014 to $6,450 for self-only and  $12,900 for a family.

For those 55 and older, you may make an additional contribution of $1000.

For a lot of great information on HSA's, visit www.hsacenter.com.

 

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IRS approves 2013 HSA contributions

HSA stands for 'Health Savings Account' which are tax-exempt accounts that help people save money for eligible medical expenses. In order to qualify for an HSA, the policyh... Read more

HSA stands for 'Health Savings Account' which are tax-exempt accounts that help people save money for eligible medical expenses. In order to qualify for an HSA, the policyholder must be enrolled in an HSA-qualified high deductible health plan, and must not be covered by any other health insurance or Medicare, and cannot be claimed as a dependent on someone else’s tax return

2013 HSA contribution limits: 

  • Individuals (self-only coverage) - $3,250 (up $150 from 2012 - $3,100)
  • Family coverage - $6,450 (up $200 from 2012 - $6,250)

For more information about HSA health plans, please call our office at 360-464-1622.

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