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Febuary 01, 2005

HSA (Health Savings Account)

What is a HSA?
Like its precursorthe MSA, or Medical Savings Account, the HSA is a two-component health plan consisting of a tax-deductible, high deductible catastrophic health insurance plan, and a tax-free claims expense reimbursement and tax-deferred savings plan. 
Reimbursements from the savings plan account, for those expenses deemed eligible (as defined under a more liberal and far broader federal definition) are received 100% tax free, while all other withdrawals are taxable as ordinary income with an added penalty when taken prior to age of 65. Simply stated, the HSA is just the permanent expansion of the former MSA, but with several very meaningful enhancements.

December 15, 2003

Expanded Wellness Plan

Healthy X Change, LLC
is expanding its Wellness and Prevention Program by having its Healthcoaches do more body screenings to identify potential health problems before illness occurs.

Febuary 3, 2004

Health Care Spending Soars

How bad does it have to get?

AP) Health care spending in the United States surged to $1.6 trillion in 2002 — about $5,440 for every American — and outpaced growth in the rest of the economy for a fourth straight year.


Administrative Contact

W. Warren Barberg, CLU
307 S. Farwell St.
Eau Claire, WI 54701

Phone: (715)456-1930
Fax: (715)835-9229



Health Savings Accounts: Are they the low cost alternative?


The cost of healthcare has continually sky rocketed out of control for the past few decades. With double-digit increases in insurance premium expenditures, individuals and employers along with their employees are realizing the benefit mechanisms of utilizing a health savings account (HSA) combined with a high deductible health plan (HDHP) over the traditional health insurance policy. In a report released on July 20 th 2004, the National Coalition on Health Care (NCHC) stated:

Looking ahead, a variety of independent studies and surveys anticipate that premiums will continue to increase at double-digit rates over the next several years. The Coalition projects that the average annual premium for employer-sponsored family health coverage will surge to $14,545 in 2006 — more than $5,000 higher than last year's average premium of $9,068 and more than double the average premium of $7,053 in 2001. (National Coalition on Health Care, 2004, p. 5)

With the massive number of well-documented “studies and surveys” showing dramatic increases in health care premium costs, the political position on health care has changed.

This shift in the political position on healthcare has recently stimulated the adoption of new legislation. On December 8th, 2003, President George W. Bush signed into law the Medicare Prescription Drug Improvement and Modernization Act of 2003. From this legislation, HSAs were established. Previous attempts at healthcare legislation have been tried, the Health Insurance Portability and Accountability Act (HIPAA) of 1996, introduced the Medical Savings Account (MSA).

Although the HIPAA legislation was adopted in 1996 forming the MSA, it was limited by the same Congressional legislation and referred to as a “demonstration project”. MSAs were quite confusing; the legislation was full of operational and procedural rules to follow. Additionally MSAs had availability limitations associated with these accounts, since they were only available to self-employed individuals and small employers with 2 to 50 employees. Notwithstanding the incumberments associated with the MSA legislation, the accounts still proved to be a worthy alternative to high priced insurance premiums.

The modern day HSAs are unarguably the next generation of MSAs, without the availability issues. HSAs were created to help individuals save for future qualified medical and retirement health expenses on a tax free-basis. One key aspect of the HSA is its portability; since HSAs are reminiscent of a savings account they are owned by the individual account holder, the individual can take it with them regardless of their employment status. The money in the account not used for qualified health expenditures rolls over from year to year, accumulating tax-free for retirement. Eligible individuals can open and fund the HSA on a tax-free basis provided they do not exceeded the maximum funding limits associated with the HDHP.

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