What is the benefit of a Health Savings Account (HSA) used in conjunction with a High Deductible Plan (HDHP)?

Let’s start with a brief introduction into what a HDHP and HSA are. With a HDHP the participant takes on more initial risk with a higher deductible.  This reduces exposure to the insurance company and results in a lower premium to you.  A Health Savings account (HSA) can be funded using pre-tax dollars, contributed by you, your employer, or anyone else on your behalf.   The withdrawals from an HSA account are tax free, as long as the monies go toward heath related expenses authorized by the IRS.  The HSA acts similar to an IRA and is only taxed if the participant does not use the funds for health related expenses.  Each year the IRS will determine the amounts allowable to contribute to the participant owned bank account.

You can certainly opt to have a HDHP without electing to have a HSA, although you might be losing the trip tax advantages described below.  There are insurance coverage plans that will provide for office co-pays and drug benefits, similar to conventional PPO arrangements.  For some people, that allows protection for catastrophic coverage and continuing preventive and routine medical care at a lower premium than plans with lower deductibles.

Consumers can purchase a HDHP and open an individual HSA in both the individual and group markets.  The money is contributed tax free to the HSA, the money is allowed to grow tax free and the money is withdrawn tax free, provided it’s used for a qualified medical expense.  While there are pros and cons to having a HDHP coupled with an HSA account, Hipskind Seyfarth Risk Solutions can help determine which plan is right for you.

HSA Limits for 2014 and 2015:

HDHP Minimum Deductible Amount

	2014	2015
Individual	$1,250	$1,300
Family	$2,500	$2,600

HDHP Maximum Out of Pocket Amount

	2014	2015
Individual	$6,350	$6,450
Family	$12,700	$12,900

HSA Maximum Contribution Amount

	2014	2015
Individual	$3,300	$3,350
Family	$6,550	$6,650

Catch-Up Contributions (age 55 and older)

2014	2015
$1,000	$1,000

About Hipskind Seyfarth Risk Solutions

Hipskind Seyfarth Risk Solutions offers a wide-range of insurance products for individuals and businesses of all sizes. HS Risk Solutions, located in Chicago, provides expertise in the area of health and ancillary benefits and property and casualty insurance for businesses and individuals. For more information, visit HS Risk Solutions website at www.hsrisksolutions.com or on Facebook atwww.facebook.com/HSRiskSolutions. 

Water Always Wins

It’s that time of year, when lightning presents a spectacular show in the skies and heavy rains, winds and sometimes twisters create havoc for those of us that enjoy the modern luxury so taken for granted called electricity.  When power goes out, basements fill with water, food begins to spoil, temperatures rise and worries persist.

There are several things one can do to prevent the summertime havoc from raining on your everyday activities.  Having a solid plan to mitigate storm risks is paramount.  If you have a limited budget and can’t afford the more expensive solution to a power outage, pay close attention to some of these simple steps.

1.     Make sure all tree branches are cut back away from power lines and your home’s roofline.

2.     Clear your gutters, downspouts and drains of any excess debris so that runoff water will drain appropriately during heavy rains.

3.     Invest in a battery backup system for your sump pump.  That way, at least your pump will continue to operate for a period of time when your power is out.  However, keep in mind that battery back-up systems will not hold a charge for extended outages.

4.     Have a cell phone power adapter handy (that can be used in your car or that is solar powered) so you can charge your phone using the car’s power, if necessary.

5.     Store items that can be easily damaged by water on higher shelves in basements and lower areas of the home. Try to avoid placing cardboard boxes or other loose items on the floor.

6.     Have plenty of flashlights available with extra batteries and be very cautious if using candles for light.  You don’t want to have to deal with a fire during a power outage!

For those who can afford it, a whole house generator system is a wonderful solution to the perils associated with power outages.  Many homes with a value of $1,000,000 or more (and many with lower values) have incorporated a natural gas powered generator into the home’s mechanical system.  That way, when the power supply is cut off, the transfer switch communicates to the generator to begin supplying power until the regular power service is restored.

Keep in mind that even with a generator, normal maintenance is required.  Generators that run for many hours or even days require oil to be added, just like an automobile.  Also, generators should cycle through a test once each week for a brief period of time.  This is normally mandated by the manufacturer and designed into the generators system.  Finally, generators require maintenance, just like your car, at least twice per year.

Assuming you’ve prepared appropriately, and still suffer a loss, it’s smart to make certain that you have the appropriate coverage for a water loss due to sump pump failure or a sewer drain back-up on your homeowners insurance.  Not all coverage is considered equal in this regard.  If you’re residing in an expensive home, make sure you have consulted with your insurance professional to ensure that you have the appropriate carrier and coverage.  Additionally, if you’ve taken appropriate steps to mitigate losses, such as installing an emergency generator back-up system, you can receive a credit on your premium for being proactive.  Again, not all carriers are equal in this regard.  If you are with a carrier that normally does not cover a significant loss for water damage, consider alternate coverage or inquire as to your ability to purchase an endorsement with extended coverage for a water loss.

Unfortunately, storms have been around forever and will continue to show up.  It’s time to review your plan and protect your family and belongings from water related losses because, water always wins.

About Hipskind Seyfarth Risk Solutions

Hipskind Seyfarth Risk Solutions offers a wide-range of insurance products for individuals and businesses of all sizes. HS Risk Solutions, located in Chicago, provides expertise in the area of health and ancillary benefits and property and casualty insurance for businesses and individuals. For more information, visit HS Risk Solutions website at www.hsrisksolutions.com or on Facebook at www.facebook.com/HSRiskSolutions.