An HSA Example at Work Video

Is a Health Savings Account right for you? Would you be better off with a High Deductible Health Plan or a Preferred Provider Organization? Mark Prudowsky of HSA Bank gives an example of an HSA at work.
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Let’s say last year you recovered by traditional of provider organization. That single coverage and your employer paid 80% of your premium nd the premium on a monthly basis was about $400.00. So, the part of that out of that monthly premium, you're going to pay about $80.00 for that premium. So, over the year you would spend in pre-taxed dollars $960.00 to have that health insurance. You can ask your employer would have to pay the rest. So, that $80.00, that 20% that you’re paying was at an average now if you're not being charged anything to have health care coverage. When you're going to take that $80.00 that you were paying for health care coverage and put that in your interest aid. As you put that in your interest aid, all the moneys are tax refer-dollars, it lowers your taxable income. So, as you put more money into your interest aid, you're actually decreasing your tax liability. For a premium comparison perspective, it's a quite significant savings to you but you still have that large deductible. So, let’s consider your PPR gap just for having the insurance, carrying the card if you will. You will spend $960.00 out of your paycheck. Then, your maximum amount out-of-pocket let’s say it goes to $3000.00 but you have to pay. Of the $3000.00 you will pay, as in post-tax dollars, in other words it's money that’s already been taxed. So, that $3000.00 that you pay maximum amount out-of-pocket, if it were a pre-taxed dollars you would have added the tax back in, wouldn’t you to make it pre-taxed, okay. So, the $3000.00 actually becomes $4000.00. It was about $1000.00 of the $3000.00 is going to be taxes. So, you’re going to spend $4960.00 in pre-taxed dollars before you have any benefit at a 100% insurance, okay. You were going to spend nothing for the height of the health plan because the premium savings are 20% greater and then, all of the PPL, plus as you put money in your bank account towards your deposited mean, those deductible expenses, you're going to lower your taxable income because the money used is tax deferred and in tax rate for qualified expenses.

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