A Word from the Life/Health Director
For over 30 years, LIA Administrators & Insurance Services has been the leading provider of professional liability
insurance to real estate appraisers. This year we began offering life and health plans for the first time. In this
section of our website, we will periodically update you on those plans as well as related topics such as health care
reform legislation. We begin by discussing Health Savings Accounts and how self employed professionals such as
appraisers can utilize them to secure health insurance on a cost effective, tax-advantaged basis.
What is a Health Savings Account (HSA)?
A Health Savings Account is a tax-advantaged account available to U.S. taxpayers to pay health care costs as well
as out-of-pocket health insurance expenses such as deductibles and coinsurance. In order to realize the tax
advantages, the HSA must be paired with a high deductible health plan (HDHP) which meets criteria established by
the Internal Revenue Service. In this brief summary of HSAs and HDHPs, we will describe how they can be utilized
to lower the overall cost of health insurance coverage while still providing a means of paying ongoing medical
expenses and protecting against a catastrophic illness or accident.
How do HSAs and HDHPs Work?
Setting up and utilizing a HSA requires the insured to take out a high deductible health plan that meets IRS
requirements. The insured then establishes and makes contributions to a Health Savings Account. In order to be
exempt from federal taxation, these contributions (like those to an IRA) are also subject to IRS limits.
*It should be noted that state tax treatment of HSAs varies. Depending on the location, HSA contributions and
earnings may or may not be subject to state income taxes.
For 2010, the IRS has set the following requirements for High Deductible Health Plans:
Single/Self Only HDHP:
Minimum Annual Deductible-$1,200
Maximum Out-of-Pocket Expenses-$5,950
Family Coverage:
Minimum Annual Deductible-$2,400
Maximum Out-of-Pocket Expenses-$11,900
Contributions Limits to a Health Savings Account (2010):
Just as it does for Individual Retirement Accounts, the IRS permits an additional annual "catch up" contribution
of $1,000 (single or family) for individuals 55 or older.
Once an individual or family has purchased a HDHP and set up a HSA, it is not necessary to secure permission from
the HSA trustee or insurance company to withdraw funds to cover medical expenses. These expenses include costs for
services and items covered by the HDHP but subject to cost sharing such as a deductible or coinsurance. They also
include many expenses not normally covered by health insurance plans such as dental and vision care costs, durable
medical equipment such as eyeglasses and hearing aids, and transportation expenses related to medical care.
Non-prescription, over-the-counter medications are also eligible in 2010, but will not be beginning in 2011.
How Do HSAs Save Money?
By taking out a high deductible rather than a more comprehensive health insurance plan, appraisers can realize
savings of 20-40% or more, depending on the deductible and other features of the plan selected. As was noted
previously, funds contributed to the HSA (and earnings on the account) are not subject to federal taxation at the
time of deposit. It is this combination of lower premiums and tax savings that can result in reduced overall health
insurance costs. Moreover, HSA account custodians such as banks generally provide checks, debit cards or both for
the insured to use in paying medical expenses. By offering to pay providers at the time services are provided, the
account holder can often negotiate significant discounts. These savings are not easily quantifiable, but can be
substantial since the provider is paid "up front" and is spared the costs of billing and (or) submitting charges
to insurance carriers.
LIA Administrators & Insurance Services has partnered with JLBG Health, a leader in this field, to provide HSAs and
qualifying HDHPs to appraisers, their families and employees. These are the same plans that the American Medical
Association has endorsed for its over 400,000 physician members. The Health Savings Accounts are provided at no charge
and the premiums for the High Deductible Health Plans are very competitive. Depending on the plan selected, they come
with up to a 3 year rate guarantee, regardless of claims. LIA selected JLBG because they offer the same great service
appraisers have come to expect from us with friendly, knowledgeable people available to provide information and answer
questions. There is no paper application to complete. Simply call our Tele-Express dedicated insurance service at
888-623-5798. It takes as little as 15 minutes. You may also visit
www.LIAHealthPlans.com for more information and to view rates for various plan options.
Suggested reading:
What is a health savings account? (part two)
Copyright 2010. Liability Insurance Administrators. All rights reserved.