This one doesn't require a Permanent Tax Home......
Are you tired of those ever increasing high Health Insurance Premiums?
Are you tired of having to itemize deductions for medical expenses and jumping through hoops to maybe get a little more money back through refund if any?
Then At Least you should look into a HSA qualified health insurance & HSA's.
First, Don't confuse HSA's with FSA's (Flexible Spending Accounts) that many employers offer. You know the one you set aside a specific amount of your income per year for medical or childcare expenses that is not taxed BUT if you don't use it for that year you LOSE it. Noooooooo...
HSA's are more like an IRA in that your money can grow and be invested. You can withdraw money from your HSA without penalties or paying any taxes as long as it is a IRS qualified medical expense which is a broader category of things compared to what your insurance will cover.
In order to start an HSA you have to have a HSA qualified insurance. What's that?
It's a higher deductible health insurance with no co pay system for meds or office visits but can offer free annual physicals, OBGYN annual visits and discounted or free services. This requires a leap in thinking outside of what you are used to so read on and consider before rejecting.
First ask your self how much am I paying extra per year in higher premium payments per month for the priviledge of having copays and lower deductibles compared to the lower premiums per month offered by various HSA Health plans?
Is that deductible per family or per person?
What about those out of pocket costs I pay after the deductible is met, which might as well be considered part of the deductible?
There are variety of plans from an assortment of Health Insurers. HSA's started as an option in 2004 so as time goes by you will see more options.
I carry my own insurance and The Travel Nurse Companies usually reimburse you up to $300 a month from my own experience but it depends the total package you negotiate.
The Beauty of it is that your HSA account and is portable. You don't have to move it to another HSA Administrator if you change employers or become self-employed unless you want to, for example, to get better service or get better investment options. Perfect for Travelers as we may rotate to a few or more of our favorite companies plus it gives us a tax advantage whether you have a Permanent Tax Home or Not.
Travel Companies can put funds into your HSA without having to pay taxes on it. They can offer a Group Coverage HSA Health Insurance plan or you can start your own Individual HSA Health Insurance plan as I have.
OK you say. HSA Health plans may be great if you are healthy and don't need to see the doctor often but what if you do and you are on multiple prescriptions. HSA-Insider (link below) probably gives a better explanation of why HSA's are still good in this instance.
I will say Traditional Health Insurance premiums are increasing every year especially if you have a chronic illness and you pay big time in premiums for those low co pays but you have become so used to it that you don't think of that money as a loss.
You really have to crunch the numbers considering tax savings and lower premiums and you will see that you don't have to be healthy to take advantage of HSA's.
HSA Facts 2007 - HSA Qualified Insurance:
Minimum Deductible: Single: $1100/yr, Family: $2200
Maximum Out of Pocket Costs: Single $1100, Family $5500
Note: These Max Out of Pocket costs limits Includes the Deductible amount and you can be covered 100% after the Deductible as in my plan.
You can Increase your Deductible to lower your Premium Payments.
No Co-pays for Prescription Meds Allowed. You can still receive discounts or free generics as in my plan and all out of pocket costs go towards your deductible.
Maximum HSA Contribution per Year: Single: $2850 Family: $5650
New in 2007: You can deposit per year up to the above amounts regardless of your deductible amount. In the past you were limited to your deductible amount. For example, if you had a family plan with the $2200/yr minimum deductible, you were limited to $2200/yr for HSA deposits. So you can lower you deductible while still maximizing your deposits which I plan to do.
Anybody or entity can put monies into your HSA tax-free. Employers, Family, Friends, Yourself or Anybody else that wants to help you.
You can set up a pre-taxed amount through an employer or you can put post-taxed money into it and lower your yearly taxable income by the amount you deposited into your HSA (Adjustment to Income Deduction).
You can spend money for medical costs from your HSA usually by checks they issue you and/or a VISA or like Debit card.
If you pay out of pocket throughout the year and have no funds or limited funds in your HSA you can make a deposit or deposits up to April, 17th of the next year and apply it to the previous year to be able to make the adjustment to yearly taxable income deduction.
After the money is deposited in your HSA you can write an HSA check to yourself equal to what your out of pocket medical costs for that year, which is basically reimbursing yourself if you need to but you still get credit for your deposit for tax purposes.
If you don't even have the money to do the above you may need a short term loan from family, friends, bank, or even your credit card for two weeks tops or a month to give yourself a time buffer. Hopefully though you keep money in your HSA and it builds from year to year like an IRA.
HSA Administrators will give you various options to invest this money in your HSA.
At Retirement Age you can withdraw HSA for any reason without penalties.
Not Taxed on money you or anybody else that deposits into the HSA.
Not Taxed on investment interest earned on HSA funds.
Not Taxed on money you withdraw from the HSA for Medical Expenses (IRS)
You can maintain your HSA if you switch to a non-qualified HSA health insurance plan but you can't make any deposits. You can make withdrawals though.
You don't need approval from your HSA administrator to withdraw monies from your HSA account. If it is not for an IRS qualified medical expense you would have to pay taxes on what you withdraw plus a 10% penalty like with IRA's.
New in 2007: You can rollover funds from an IRA or FSA (Flexible Spending Account) once in a lifetime to your HSA but you must maintain an HSA qualified health insurance plan for 12 month after the rollover or you would have to pay taxes plus 10% penalty.
You can still maintain Vision Insurance and Dental Insurance.
Alot of first time Travelers may receive a lump sum pension from their previous employer. You could roll this into a standard IRA to avoid taxes and maintain control over it and then later roll part of it into an HSA once you have a HSA Qualified Health Insurance Plan.
For more Info on HSA's and HSA qualified health insurance plans:
Wikipedia-HSA - Constant Up to date Detailed Info on HSA's
HSA Insider - Find HSA Administrators or Health Plans for your State, Many FAQ's
HSA State Income Tax Guide - HSA Tax Guide Specific to States.
E-Health Insurance - Find HSA Health Plans for your State and Compare
Blue Cross Blue Shield - I believe most State BCBS plans offer Group or Individual HSA Health Plans. I like in particular their online tools where you can compare in detail many different HSA plan options and crunch the numbers yourself, get detailed info on coverage, and various other healthcare cost estimate tools.
IRS - HSA
IRS 06-07 Changes for Individuals - Includes HSA Changes
HSA Qualified Expenses - Covers a long list
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