ColoHealth Reports Rapid Increase in HSA Sales

    /24-7PressRelease/ - FORT COLLINS, CO, February 02, 2006 - Online health insurance retailer ColoHealth reports 50% increase sales of insurance plans that qualify to work with Health Savings Accounts (HSAs).

ColoHealth, which markets individual and family health insurance plans in the state of Colorado, reported that 32% of its 2005 sales were for HSA-qualified plans, compared to just 21% in 2004. During the last three months of the year, 39% of its sales were HSA plans.

HSAs are made up of two parts -- a high deductible healthcare insurance policy coupled with a tax-deferred custodial account. Any money placed in the account is tax-deductible, and can be used to pay medical expenses tax-free. Any money not withdrawn to cover medical expenses grows tax-deferred, like an IRA.

Fred Adams, Vice President of ColoHealth, said the company is expecting over half its business to be HSA-qualified plans in 2006. "The premiums for HSA plans are typically about 30% lower than for traditional plans. When you combine the tax savings with the lower premium, it is not unusual to cut your costs by 50% or more."

HSA-qualified plans carry a deductible of $1,050 or more, so the policy holder is responsible for paying for doctor visits and prescription drugs until the deductible is met. "People are realizing that they should look at their health insurance the way they look at car insurance - use it to cover the major expenses, not the routine oil changes", said Adams.

Using an HSA to pay non-covered medical expenses

Funds from an HSA can be withdrawn tax-free to pay for virtually any medical expense not covered by the health insurance policy. This could include dental expenses, eye glasses, household medical expenses like aspirin, and even charges for alternative treatments like acupuncture or homeopathy.

Because the funds in an HSA grow tax-deferred like an IRA, yet are not taxed if withdrawn to cover medical expenses, most financial experts are recommending that HSA-holders fund their HSA before funding any other retirement vehicle.

Federal law allows HSA funds to pay for Medicare premiums, long-term care insurance, or even nursing home care.

ColoHealth is an online insurance agency serving individuals and families throughout the state of Colorado. ColoHealth offers both HSA-qualified and traditional plans, instant quotes, online applications, and personal assistance.

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