Contact Information: Contact: Henry Stimpson Stimpson Communications 508-647-0705 Henry@StimpsonCommunications.com Jim Edholm Business Benefits Insurance 978-474-4730 jedholm@bbibenefits.com
Health Savings Account -- Law Firm's Best Friend, Edholm of Business Benefits Insurance Writes
| Source: Business Benefits Insurance
ANDOVER, MA--(Marketwire - January 26, 2010) - Health savings accounts (HSAs) can be "a law
firm's best friend, or at least best benefit friend," Jim Edholm of
Business Benefits Insurance writes in a column in a recent issue of
Massachusetts Lawyers Weekly.
First, the typical law firm employee is intelligent, educated, and better
paid than the typical white-collar employee performing similar tasks. He
can appreciate the logic of taking dollars otherwise payable to the carrier
and putting them into his, the employee's, account.
He understands that if he doesn't use it, he gets to keep it, so he's more
likely therefore to maintain his health, consume less care, and keep more
of the money.
Second, an equity partner's premium is mistreated by the tax laws. Her
premiums are treated as pass-through income. So if the premium is $16,000
and the equity partner's $16,000 is paid by the firm, she has to declare
the premium as taxable income. She pays every miscellaneous medical cost
with after-tax dollars. That means she has to earn $1.80 to pay $1.00 in
medical bills. The HSA solves that problem via deductible deposits.
In Massachusetts, the most common deductible is $1,500 single/$3,000
family, but the allowable deposits in 2010 are $3,050 single/$6,150 family.
So the equity partner can deposit and deduct $3,150 more into her family
HSA than her plan will let her allowably spend.
With an HSA, a partner's eyeglasses, hearing aids, dental copays,
deductibles and coinsurance are all legitimate tax-free withdrawals. If
the partner is over 55, she can deposit an additional $1,000 per year.
An HSA offers more flexibility than a flexible spending account. For
example, if an employee plans to deposit the $250/month needed to just meet
the $3,000 deductible but found he needed eyeglasses midway through the
year, he could pay for the eyeglasses by simply depositing additional HSA
funds one month and withdrawing them the next.
Business Benefits Insurance (www.bbibenefits.com) is an employee benefits
planning firm in Andover, Mass. Edholm's benefits blog can be read at
http://bbibenefits.wordpress.com. More information about HSAs and other
plan options is available by contacting Edholm at JimEd@bbibenefits.com or
calling 978-474-4730.