Health Savings Accounts – An American Innovation in Health Insurance

INTRODUCTON – The term “health insurance” is commonly used in the United States to specify any program that helps pay for medical expenses, whether thru privately purchased insurance, social insurance or a noninsurance cultural welfare program funded by the government. Synonyms for this practice include “health coverage, ” “health care coverage” plus “health benefits” and “medical insurance. ” In a even more technical sense, the term is used to describe any form of insurance policy that provides protection against injury or illness.

In America, the health insurance plan industry has changed rapidly during the last few decades. In the 1970’s the majority who had health insurance had indemnity insurance. Indemnity insurance is oftentimes called fee-forservice. It is the traditional health insurance in which the medical giver (usually a doctor or hospital) is paid a fee per each service provided to the patient covered under the policy. A major category associated with the indemnity plans is that of consumer driven health (CDHC). Consumer-directed health plans allow individuals and individuals to have greater control over their health care, including as soon as and how they access care, what types of care they collect and how much they spend on health care services.

These blueprints are however associated with higher deductibles that the insured must pay from their pocket before they can claim insurance money. Individual driven health care plans include Health Reimbursement Plans (HRAs), Adaptive enough Spending Accounts (FSAs), high deductible health plans (HDHps), Archer Medical Savings Accounts (MSAs) and Health Personal savings Accounts (HSAs). Of these, the Health Savings Accounts are the most up-to-date and they have witnessed rapid growth during the last decade.


A Health Savings Account (HSA) is a tax-advantaged clinical savings account available to taxpayers in the United States. The funds contributed towards account are not subject to federal income tax at the time of deposit. Most of these may be used to pay for qualified medical expenses at any time without united states tax liability.

Another feature is that the funds contributed that will Health Savings Account roll over and accumulate year over year or so if not spent. These can be withdrawn by the employees during this writing retirement without any tax liabilities. Withdrawals for qualified fees and interest earned are also not subject to federal taxes. According to the U. S. Treasury Office, ‘A Health Bank account is an alternative to traditional health insurance; it is a savings product that has a different way for consumers to pay for their health care.

HSA’s assist you to pay for current health expenses and save for long run qualified medical and retiree health expenses on a tax-free good reason. ‘ Thus the Health Savings Account is an effort to increase the exact efficiency of the American health care system and to encourage drop some weight be more responsible and prudent towards their health care wants. It falls in the category of consumer driven health care plans.

Starting point of Health Savings Account

The Health Savings Account was established under the Fasciare Prescription Drug, Improvement, and Modernization Act passed because of the U. S. Congress in June 2003, by the United states senate in July 2003 and signed by President Rose bush on December 8, 2003.

Eligibility –

The following folks are eligible to open a Health Savings Account –

– Individuals who’re covered by a High Deductible Health Plan (HDHP).
– Those people not covered by other health insurance plans.
– Those never enrolled in Medicare4.

Releated Post