| Do you have medical expenses that you incur | | | | The second medical savings plan is called a |
| every single year? Do you always use up your | | | | HSA or Health Savings Account. Due to the |
| entire medical insurance deductible on | | | | rising cost of medical expenses, our |
| co-pays? | | | | government has come up with what is known as |
| | | | a high-deductible savings plan for medical |
| If so, there are a couple of medical saving | | | | expenses. How it works is this, you can set |
| plan available that would allow you to use | | | | aside money, tax free, into an account that |
| tax-free money to pay for your medical | | | | you own. What this means is that if you |
| expenses. That is an automatic 28%+ savings! | | | | decide to change jobs or quit entirely, you |
| You see every time you pay the co-pay using | | | | keep the money and the account. The account |
| your checkbook, credit card, or debit card | | | | is a bank account in your name. What is great |
| you are paying with money that has already | | | | about this plan is that most employers will |
| taxed by the federal, state, and local | | | | actually put money in this account for you! |
| governments. | | | | Every year, my company puts in $2000 for me |
| | | | to use for medical expenses. However there is |
| The first medical savings plans that allows | | | | one catch that you need to know about before |
| you to pay for your co-pays with tax free | | | | pursuing this plan. This is a high deductible |
| money is called a Flexible Spending Account, | | | | plan, which means that my deductible is also |
| or sometimes just called a "Flex Account". | | | | $2000 per year. This plan will really pay off |
| How does a Flex Account work? Simple. You | | | | if you are a healthy individual, who expenses |
| simply inform your employer that you wish to | | | | are less than $2000 per year. Once again, |
| set a portion of your paycheck aside for | | | | check with your Human Resources Department to |
| medical expenses. To do this you will need to | | | | get more details on this type of plan. |
| visit your Human Resources department and | | | | |
| fill out the appropriate form. And then each | | | | By using these two plans you can save a |
| pay period, the designated amount of money is | | | | tremendous amount of money on your medical |
| withheld from your check, tax free, and | | | | expenses and in the process reduce the amount |
| deposited in a savings account for you to use | | | | of taxes you will pay at the end of the year. |
| for your next doctor's visit. And the best | | | | If you have "planned medical expenses" every |
| part, since you are withholding the money tax | | | | year that it will benefit you by planning |
| free, you will pay less in taxes at the end | | | | ahead and investigating one of these tax free |
| of the year. It's a win-win. | | | | plans. |
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