Have you considered a Health Savings Account?  This tax exempt account established exclusively for the purpose of paying qualifying medical expenses and is accompanied with a high deductible health insurance policy.  This may be your best approach to health assurance. Contributions can be made by the employer and/or the employee.  It comes with free checks and a free debit card.

EMPLOYEE BENEFITS

IRS issues new guidance for HSAs

The US Treasury Department and the IRS have issued new guidance on the maximum contribution levels for health savings accounts (HSAs) and out-of-pocket spending limits for high-deductible health plans (HDHPs).  Funded by employers, HSAs are becoming more popular with consumers.  The funds contributed to the accounts are employee-owned, so unspent money grows tax-free and goes with employees when they move to another job.

New annual contribution levels for HSAs

The maximum contribution levels for HSAs and out-of-pocket spending limits have been indexed for cost-of-living adjustments for 2009 and include the following changes:

●For 2009, the maximum annual HAS contribution for an eligible individual with self-only coverage is $3,000.

●For family coverage, the maximum annual HAS contribution is $5,950.

●The catch-up contribution for individual who are 55 or older is increased by statute to $1,000 for 2009 and all years going forward.

●Individuals who are eligible on the first day of the last moth of the taxable year (December) are allowed the full annual contribution.  For those who are no longer eligible individuals on that date, the HAS contributions apply pro rata based on the number of months of the year the taxpayer is eligible.

New rules for HAS-compatible HDHPs

●For 2009, the maximum annual out-of-pocket amount for HDHP self-coverage increases to $5,800, and the maximum annual out-of-pocket amount for HDHP family coverage is $11,700.

●For 2009, the minimum deductible for HDHPs increases to $1,150 for self-only coverage and $2,300 for family coverage.