TonyHolland

When companies look at managing group health insurance costs, there are two main reasons why they often don't find the best strategy.

1. Health insurance is complicated! There are hundred of plans and there is no one that helps most companies understand the differences with co-pays and deductibles and all the different buckets of costs.
2. Covering health care gets more expensive every year!   This has become a major issue especially for small companies.
   

Luckily Bernard is here to help. Not only do we specialize in explaining clearly how plans work and what the best plan, is we also know that the Bernard recommended programs will result in a much less increase than you are accostomed to.

Ask to see our case studies where our clients are getting a 0% increase or an actual decrease. 

Tony 502.664.2820

I was asked recently about Health Saving Accounts and the accounts are much more flexible than most people think.

One common miconception is that money from Health Savings Accounts can only be used to pay for family members who have HSA eligible health insurance plans.  In fact,  you can pay for medical expenses for your family even if they are not on an HSA eligible plan.  This means if your wife is on a group health insurance plan at work that is a traditional co-pay plan and you have an HSA, you can pay for her co-pays using money from your Health Savings Account. 

Ask me about some of the other flexibilities for the HSA like eyeglasses and braces.  I can also explain how to use the account to pay youself back.

Tony.Holland@bernardhealth.com

As tax season winds down and the window of opportunity to contribute to your Individual Retirement Account (IRA) or Health Savings Account (HSA) is coming to a close, let's look at some contribution strategies.

In an ideal world, we would fully fund both our IRA and HSA as retirement and health support vehicles, but when does it make sense to use money from your IRA to fund your HSA?

First, here are the rules: You can do a one-time rollover from your IRA into your HSA as long as it does not exceed your HSA maximum allowed deduction. The amount rolled over from your IRA that exceeds your maximum HSA contribution amount would be treated as an IRA distribution so be careful there.

So now that we know it can be done, does it make sense?

The answer is sometimes.   If you can contribute money pre-tax, then it is best to fund your individual Health Savings Account from pre-tax earnings or as a tax deduction 'above the line" on your tax return.  In other words, use money that is not in your IRA first if you can.  You get the benefit of tax savings and you get a second account for retirement.  If you cannot fund your HSA from other funds, it does make sense to fund your HSA from your IRA in some cases.

Bottom Line

If you can afford to make Health Savings Account contributions from current income streams, then do that first.  If you are under age 59 1/2, then it would make sense to use your one-time rollover to roll some of your IRA into your HSA.  If you are are over 59 1/2, then take the distribution from your IRA as taxable income and make your HSA contribution from there.  

If you have further questions on this, our team at Bernard Health is glad to help! dont hesitate to call (502.664.2820) or email tony.holland@bernardhealth.com 

You should fund your Health Savings Account (HSA) before your Individual Retirement Account (IRA).  Here's why.

The Advantages of HSAs Over IRAs

Even though both an IRA and HSA allow you to take a tax deduction for contributions, an HSA lets you withdraw money tax and penalty free for qualified medical expenses.  Try doing that with an IRA.  Both an IRA and an HSA let you roll over money year after year without restrictions.  So the best course of action is to fully fund your HSA before funding an IRA or other type of retirement account.  An HSA is the only account that allows tax free withdrawals.   Therefore, a Health Savings Account is not only a great investment in your health, it's also the best retirement product out there.

Most of us will face some medical issues in our golden years - when that happens, you can withdraw tax-free money from your Health Savings Account to help cover the cost of care. Try doing that with an IRA.  If you dont have any medical expenses then you can withdraw the money just like an IRA.  An HSA is a better IRA.  

In order to open a Health Savings Account, you will need to have an qualified health insurance plan. If your company doesn't offer a 401k and you want to learn more about the best retirement plan call us at (502) 664-2820.

Health Savings Accounts are are the best way to invest in you.  

With a Health Savings Account (HSA), you can build a healthcare "rainy day fund" for healthcare expenses.  There are benefits of having the peace of mind that come with savings alone, but what makes HSAs especially exciting are tax advantages coupled with healthcare coverage that protects you and your family.

When it comes to group health insurance, our team at Bernard Health believes that HSAs are the best idea to come along in a long time.  The government allows individuals with qualifying health insurance plans to open Health Savings Accounts to help pay and save for healthcare expenses.  Both individuals and employers can enjoy tax advantages corresponding with HSA contributions,  but unlike other kinds of savings accounts (like HRAs and FSAs), the individual gets to control and keep any unused funds each year, and the account grows over time. 

Some Health Savings Account stats:

• 70 percent of HSAs are owned by people over 40
• 1/3 earn below $50,000 per year
• 75 percent of Health Savings Account holders have families
• HSA contributions are free from federal and state tax (in most states)
• Interest accumulates tax free
• Money spent from the individual HSA on qualified medical expenses is tax free

This is a truly portable savings fund, and any money left over stays with the individual regardless of where they work. Accounts earn interest and may be invested, offering the
ability to grow the accounts for health care needed later in life.

TAX SAVINGS EXAMPLE

For every $1000 put into an HSA the federal tax savings are:

Tax rate:                    Potential Savings:
35%                           $350
33%                           $330
28%                           $280
25%                           $250
15%                           $150

Also most states allow the contribution to be free from state tax as well.

Health Savings Accounts grow over time

If someone put in $1,500 each year and spent $500 of that every year starting at age 35, after 30 years the account will have grown to $185,000 (assuming invested at 8%).  And the best part is that at age 65, account funds are available for non-medical expenses, without tax penalties!

HSA and Qualifying health plan basics

The idea is simple: you pay for all healthcare up to an out-of-pocket maximum with money in your Health Savings Account, and once you have reached your maximum, all healthcare costs are paid by the insurance company.   While some costs may not count toward your deductible, you can even pay for such qualified expenses as braces, eye glasses, and chiropractors with tax-advantaged money. 

Bernard Health was founded, in part, to help individuals and businesses save money on healthcare expenses by taking advantage of Health Savings Accounts. To learn more, visit our website or call 502.664.2820.

I know not everyone shares my enthusiasm for tax season, but it’s that time of year again. We all scramble for ways to save on taxes, and this year small businesses are getting a boost from the recent health care reform act. So the good news is your 2010 taxes could be a lot less this year.

Obama’s controversial health care reform law, passed in March, helps small businesses enjoy some substantial credits for health insurance. And that means good news for you this tax season. Almost 84 percent of all small businesses in the country will be eligible to receive a tax credit to buy health care coverage for employees.  That amounts to 4 million small businesses.  The IRS is so excited about this they even put together a YouTube video.

2. Calculate your average employee wages:
Add up total wages for all employees counted in your FTE calculation (both full-time and part-time). Divide this amount by the FTE number you calculated in step 1 and round down to the nearest $1,000. Enter your average wages number in the second box in the calculator.

3. Determine your qualified expenses :
Determine your total premium contributions for employees counted in the FTE calculation, verify that you are paying at least 50 percent of total premiums, and if so enter your premium contribution amount in the third box in the calculator.

The calculator will then calculate your estimated credit amount (if the calculator estimates that you will not qualify for a credit, it will display “N/A”). For more information on this credit and how to save money on premiums or institute a new plan call Bernard Health at 502.664.2820.