Tri-State Neighbor: South Dakota Farm Newspaper

Producers looking for health insurance may have a new option with a health savings account (HSA).

Ellen Laden, director of public relations for Golden Rule Insurance Co., says HSAs make good options a lot of the time for farmers, ranchers and small businesspeople who have to buy their own insurance.

“First of all, the premiums are about 50 percent less than the premiums would be for a more traditional plan, like a co-pay plan,” Laden said. “Everyone contributes in a family to the deductible.”

Besides having no co-pay, an HSA allows people to have control over what they are spending on health insurance each year.

“They will know that once they meet their deductible if they have to have surgery or they have to have very expensive diagnostic test or they have something unexpected happen, they know their health plan will cover their covered expenses at 100 percent,” she said.

Laden also says HSAs offer a triple tax advantage. Any money put into an HSA is tax deductible. Money put into the HSA earns interest and grows tax deferred.

“Anything you take out of there to either meet your deductible or to pay for things like vision and dental care are considered tax-free,” she said.

While money in an HSA can be used for dental and vision expenses, they do not count toward the deductible.

The government has limits on how much can be put into an HSA each year. For 2008, individuals can put $2,900 into an HSA, and families can save $5,800.

For HSA holders 55 and older, they can save up to $3,800 for an individual and $6,700 for a family.

The government also has a minimum deductible of $1,100 for an individual and $2,200 for a family.

For anyone who opens an HSA, they own the money that is in the account. Unspent money stays in the account year after year until the owner spends the money.

Once a person reaches age 65, even if they are on Medicare, they can spend money from their HSA on healthcare tax-free. After age 65, HSA owners can take the money out for other things.

“The government says once you hit age 65 you can take any savings out of your HSA account and use them for anything other than healthcare as long as you pay ordinary income tax on it,” Laden said.

Laden says while HSAs are a good option for producers and small businesspeople, finding the right insurance plan is the most important thing to do.

“In the end, it's about finding the right affordable health plans for you and your family. There is no one size fits all for everybody,” she said. “You want to make sure to find a health plan that's affordable but that also meets your family's needs in terms of what they need covered.”

Golden Rule now offers insurance plans in South Dakota, Nebraska and Iowa. For more information, visit www.goldenrule.com or call (800) 974-4472.

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