HSA Tax-Break Hat Trick
Hit it between the pipes by using your health savings account (HSA) to save on long-term care insurance (LTCi) premiums You may already know that one of the “top shelf ” products Member Benefits offers to Wisconsin public school employees is individual long-term care insurance (iLTC). Our partner, LTCi Marketing Administrators, offers policies that allow you to receive the care you need at home, in an assisted living facility, nursing home, or memory care facility—services not covered by Medicare or health insurance. But did you know that you may be able to save money on your iLTC premiums by paying with funds from a Health Savings Account (HSA)? If you have a high deductible health plan, you probably have an HSA, which is a tax-advantaged health savings account. And having an HSA may give you a hat trick of tax savings. Kiplinger’s Personal Finance describes an HSA as a powerful savings tool because “an HSA gives you a triple tax break:” • Contributions are sheltered from income taxes. • The money grows tax-deferred. • The funds can be withdrawn tax-free for medical expenses. The adjacent “scoreboard” illustrates how an HSA can be used to save money on your iLTC premiums.
Get in the game
In 2016, individuals with HSAs can contribute up to $3,350 if they have individual health coverage or $6,750 if they have family coverage. Those age 55 or
older can contribute an additional $1,000. According to the Internal Revenue Service, distributions from HSAs can help pay for a variety of medical expenses including “qualified long-term care services and premiums paid for qualified long-term care insurance contracts.” Health Reimbursement Accounts (HRAs) may also be used to pay for iLTC premiums but only if the district defines iLTC premiums as an eligible expense. There are also state and federal tax reductions available for employees, their spouses, and dependents. Consult with your employer or tax professional for more information.
Light the lamp!
Score your goal by getting more information about the iLTC insurance program sponsored by WEA Member Benefits. The earlier you purchase iLTC coverage, the lower the premiums because your age is a major consideration in determining your rate.
This is general information only. Members should consult their tax accountant or attorney for detailed advice regarding their particular tax or financial situation. Long-term care (LTC) insurance products are underwritten by multiple LTC insurers. Program administered by LTCi Marketing Administrators Inc. (LiMA).
Published on Jan 14, 2016
Published on Jan 14, 2016
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