Quick Facts: Health Savings Accounts

Time Insurance Company      John Alden Life Insurance Company      Union Security Insurance Company

For More Information, Please Contact:

Peter Duckler
312-423-4930
pduckler@hlbcomm.com

WHO'S TAKING ADVANTAGE OF HEALTH SAVINGS ACCOUNTS (HSAs)?

One of the leading individual and small-group health insurers, Assurant Health, states that, since 2004, the first year HSAs were available, 37% of Assurant Health's new individual medical sales have been HSAs. To date, Assurant Health has received Individual Medical HSA applications to cover over 600,000 people.

WHO’S BUYING HSAs?

Assurant Health's most recent data show that:

• 66% of HSA purchasers are families with children
• 63% of HSA purchasers are over age 40
• 24% of HSA purchasers are from households of four or more people
• 52% of all HSA purchasers have high school or technical school training as their highest level of education
• 43% of HSA applicants did not indicate having prior health insurance coverage on their application
• 30% of HSA purchasers have family incomes of less than $50,000
• 22% of HSA purchasers have family incomes of less than $40,000
• 18% of HSA purchasers have a net worth of less than $25,000

WHAT ARE HSAs?

Signed into law in December 2003, HSAs:

• Provide a vehicle for tax-advantaged health savings
• Not only increase health insurance options, but also help consumers control their own health care costs
• Make health insurance more affordable by allowing consumers to save money in a tax-free account to pay for health care costs
• Allow individuals with self-only policies to make a pre-tax annual contribution of $3,050 and families to make an annual contribution of up to $6,150 into HSA accounts

HOW ARE HSAs BENEFITING CONSUMERS?

• HSAs are combined with a qualifying high deductible health insurance plan to provide major medical protection and significant savings on premiums
• Funds contributed to an HSA belong to individuals and are completely portable; they can be carried from job to job and into retirement
• HSAs can be used during retirement to pay for retiree health care, Medicare expenses and prescription drugs
• HSAs are available to all individuals with a qualified high deductible insurance plan, and offer consumers more flexibility, choice and tax advantages

WHAT ARE THE TAX ADVANTAGES OF HSAs?

• Contributions by an individual, employer or employee are all tax-free
• Contributions qualify for federal tax deductibility
• Employers can save on their FICA taxes
• Any interest earned on the funds in an HSA are tax-free
• Funds used for qualified medical expenses are tax-free

WHAT CAN HSA FUNDS BE USED FOR ON A TAX-FREE AND PENALTY-FREE BASIS?

• Qualified medical expenses as defined under Section 213 of the IRS Code
• COBRA insurance
• Health insurance premiums for individuals receiving unemployment compensation
• Qualified long-term care insurance and expenses
• Medicare and retiree health insurance premiums, but not Medicare supplement premium

Assurant Health products are issued and underwritten by Time Insurance Co., John Alden Life Insurance Co., and Union Security Insurance Co.

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