• What is a high deductible insurance plan?
  
• How much can I contribute to an HSA in 2005?
  

HSA plans are available to everyone, but if you are a Sole-Proprietor or an S-Corp, and you take advantage of all of the tax deductions available; you can reduce the cost of your monthly premiums significantly!

If you enroll in a HSA-Qualified High Deductible Plan and you contribute the maximum amount allowed to your Health Savings Account (HSA), you will receive a substantial tax credit, which will in turn reduce the true cost of your health insurance premiums for you and your family. The IRS also allows Sole-Proprietors and S-Corps to deduct up to 100% of the health insurance premiums for them and their families. If you couple the HSA deduction with the deduction of your health insurance premium, the majority of your health insurance premium can be paid for by Uncle Sam! Look at the true life example below.

The monthly premium for an "HSA-Qualified plan" for a 44 year old male, his wife and two children, is $242 a month.

If the applicant is in a 28% tax bracket and contributes the maximum amount allowed of $5450 into a Health Savings Account, they will receive an annual tax credit of approximately $1526, or $127 a month.

If the applicant deducts the monthly premium of $242 they will receive a tax credit of approximately $68 a month.

If you subtract the monthly tax CREDIT of $127 for the HSA contribution, and the monthly tax CREDIT of $68 for the deduction of the monthly premium, FROM the monthly premium of $242, the NET cost of HEALTH INSURANCE FOR AN ENTIRE FAMILY is only $47 a month!

The figures shown are for illustrative purposes only.
Consult your tax advisor for more information.