Health Savings Accounts

What are they and what changes should you expect?

The Amherst Chamber of Commerce offers a variety of insurance products through our in-house brokerage firm, Benefit Solutions and our licensed Benefits Manager Christian Solecki. There are many options available when it comes to choosing your health care plan and our goal is to make the process as stress-free as possible. When choosing your health insurance plan, it is important to consider many factors, including deductible rates and the cost of health care options. 

One plan option available to our Chamber insurance subscribers is a Consumer Driven Health Plan. This type of health care combines a high deductible health plan with a Health Savings Account (HSA) that allows you to pay for eligible medical expenses which are not covered by your plan. HSA accounts contain funds that you contribute either in a lump sum or through payroll deductions, and can be used for the prevention or alleviation of a physical or mental defect or illness.  HSA funds can also be used for retirement health care costs as long as the expenses meet HSA eligibility requirements. 

Individuals can contribute a maximum of $3,050 yearly to an HSA account, while families can contribute a maximum of $6,150 per year. You are able to deposit funds as often as you would like, providing you do not exceed the maximum contribution limit. You are also able to roll over any leftover funds from year-to-year. 

As with most aspects of health care, the Patient Protection and Affordable Care Act of 2010 will change some requirements for Health Savings Plans throughout the next few years. Beginning January 1, 2011, HSA funds can no longer be used to purchase over the counter medicine with out a doctor's prescription or a medical note of necessity. Over the counter medicine that will be affected include allergy and sinus relief, cough, cold and flu medicine and pain relief medicine. 

The Patient Protection and Affordable Care Act also includes an increase in tax penalties for individuals who use their HSA funds for non-qualified medical expenses. There is currently a 10% tax penalty for incorrectly using HSA dollars; however this penalty will jump to 20% in 2012.

The Amherst Chamber understands that it can often be difficult to keep track of current insurance regulations, let alone the many changes that will be occurring throughout the next few years as part of health care reform. We will continue to be your partner as you work to find the employee benefit solutions that best suit your needs.  Please do not hesitate to contact Christian Solecki, Benefits Manager, at 716.632.6905 or csolecki@amherst.org with any questions or concerns you may have. The Amherst Chamber is here to help you make sense of all your options and choose the one that fits your business requirements.