Monday, August 3, 2009

LAWYERS: Healthy Attitude

There is alot of of healthcare debate these days. How does this debate impacts my practice and colleagues is hard to say. Most of my cohorts are self-employed. Some have associates, most have legal assistants. Some purchase health insurance for their employees, some don't even have insurance for themselves.

I have been trying for years to talk many of my colleagues into participating in one of the best ideas ever, Health Savings Accounts (HSA's). Passed during the Bush administration, an HSA is a tax-free savings account designed to defray costs, instill some control, and place personal responsibilty for one's health.

An HSA is simple: If a self-employed or otherwise qualified person has a policy with a relatively high deductible (mine is $2500), they can open an account with a qualified institution (I have mine with a bank that is federally insured), and deposit up to nearly $3000 per year. The best qualities of this plan are 1.) that deposits into the account amount to a tax credit (like an IRA) where you can invest it anyway you like; and 2.) the account accumulates from year to year. This means that if one deposited money into this account on a regular basis, there would be perhaps enough money to pay the deductible or put the account holder in a position to increase the deductible and drive premiums lower, all with tax-free money.

The downside? There are none. Why don't more of my colleagues have HSAs? No clue.

The only thing worse than not taking advantage of the options available is the fateful decision not to get an annual physical to begin with. What is at stake by not taking care of oneself is far greater than losing a tax credit.

2 comments:

Jamie said...

Are there penalties for early withdrawal? Is there an age at which I can take it out with no penalty and NOT use it for health care? (Or is it use it or lose it - which would be a downside?)

Sure, I could google the damn answers, but why? When I have you :)

Keith T. Lauerman said...

You use a debit card and you can pay for anything health related from teeth to eyes. There may be a penalty for withdrawal if you use it for any unrelated purchases. Your expenses are automatically saving 15-32% because it is non-taxed money you are using.