Page 4 - Upper Peninsula Business Today -- July 2018
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Concerned About Healthcare Expenses In Retirement? How HSAs Can Help
Patricia Barton
Healthcare costs are a significant concern for many Americans, particularly for those approaching retirement. One increasingly pop- ular way to manage medical expenses is to save into a Health Savings Account (HSA). If you have access to an HSA, read on for details on how you may use it to optimize your healthcare savings.
The fundamentals of using HSAs
In order to have access to an HSA, you gen-
erally must be covered under a high deductible health plan (HDHP) and have no other form of health coverage. Medicare participants cannot make HSA contributions. High deductible health plans require you to make larger out-of-
pocket payments to meet the plan’s deductible amount. The minimum deductible is $1,350 for an individual or $2,700 for a family. The total out-of-pocket maximum (including deductibles, co-payments and co-insurance, but not premiums) can be as high as $6,650 for an individual and $13,300 for a family.
Since HDHP plans come with larger up- front costs, they generally offer a HSA to help participants manage their medical expenses. In 2018, individuals can contribute up to $3,450 annually to their HSA while families (two or more covered under the same plan) can make an annual contribution of up to $6,900. Contribu- tions can either be made on a regular basis (such as monthly deposits into your account), at var- ious times during the year or even all at once. All HSA contributions for 2018 must be made by April 15, 2019, the tax filing deadline.
The advantages of using HSAs
HSAs offer three key benefits. First, they pro-
vide a flexible source of savings to cover a variety of out-of-pocket qualifying medical expenses. Examples include prescription drugs, x-rays, urgent care, dental care, eyeglasses, eye surgery, or even your insurance deductible. Check with your tax professional or visit pubs/about-publication-969 to learn what expenses you can cover with an HSA.
The second benefit HSAs provide is a tax-effi- cient source of funds. With an HSA, you can:
• Deduct the value of any contributions to an HSA from your income taxes, even if you don’t itemize deductions;
• Exclude from your income any contribu- tions made to your HSA by your employer;
• Accumulate earnings (interest, etc.) on sav- ings in the account on a tax-free basis; and
• Receive tax-free distributions to pay for qual- ified medical expenses.
The third key feature of HSAs is that the money doesn’t have to be spent by a specific deadline. Funds can continue to accumulate in the account and be used at a later date, including retirement. The longer you contribute to a HSA, the more likely it is that you will accumu- late meaningful savings which you can invest in other areas.
A retirement supplement
Keep in mind that once you retire (and reach
at least age 65), you can enroll in Medicare to help cover your heath expenses. Be aware that you will still need to pay premiums, including for Part B, the Part D prescription drug plan and Medicare supplemental insurance policies. In addition, Medicare generally doesn’t cover long- term care expenses, so you may need to purchase some form of long-term care coverage. Visit patient.html to see a list of what costs are cov- ered.
Your HSA savings are available for you to use on a tax-free basis to pay Medicare-related pre- miums and even to pay premiums for long-term care insurance. This is in addition to other qual- ified out-of-pocket expenses you may face in retirement.
Tax-free access to dedicated healthcare savings
can give you peace of mind in retirement. If you already contribute to an HSA or are considering enrolling in a high deductible health plan, con- sider working with a financial advisor and tax advisor who can help you evaluate what the account could mean for your financial situation.
Patricia Barton, CRPC®, BFA®, APMA® is a Private Wealth Advisor with Flourish Financial Partners, a private wealth advisory practice of Ameriprise Financial Services, Inc. in Mar- quette, MI. She specializes in fee-based financial planning and asset management strategies and has been in practice for 19 years. To contact her, please visit: or call (906) 226-7526. Office location: 1501 Division St.
Marquette, MI 49855
Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax
advisor or attorney regarding their specific sit- uation.
Investment advisory products and services are made available through Ameriprise Financial Services, Inc., a
registered investment adviser.
Ameriprise Financial Services, Inc. Member FINRA and SIPC.
© 2018 Ameriprise Financial, Inc. All rights reserved.
Boss Employees Tapped For Everyday Hero Award
IRON MOUNTAIN — BOSS Snowplow employees Val and Korey Carlson recently were recognized with the Everyday Hero Award from The Toro Company for their many volunteer hours logged with the Goodman-Armstrong Creek Rescue Squad in Wisconsin.
Since 2005, the Everyday Hero Award has rec- ognized employees who demonstrate an extraordinary commitment to strengthening communities through volunteerism.
Together, the Carlsons contributed a com- bined total of 518 hours in 2017 with the rescue squad, which is a non-profit emergency trans- port service that serves the Goodman and Arm- strong Creek areas in northeast Wisconsin.
The Carlsons were selected for the award from among Toro employees worldwide.
“Val and Korey fit the criteria and have a great story of service to their community,” said Jud- son McNeil, president of The Toro Foundation.
Everyday Heroes are nominated by a nonprof- it organization or their peers. Volunteers can be involved either in a single organization or a
range of causes. Award recipients receive both company recognition and a monetary gift that can be directed to a nonprofit organization of their choice.
BOSS Snowplow manufactures plows and other equipment for trucks, UTVs and ATVs – such as salt and sand spreaders and box plows — built for snow and ice management profes- sional as well as the homeowner. BOSS has grown to be among the leaders in sales of truck mount plows.
BOSS products are designed and manufac- tured in Iron Mountain. The company main- tains a network of nearly 800 dealers worldwide.
The Toro Company produces outdoor envi- ronment equipment that includes machinery for turf maintenance, snow and ice manage- ment, landscaping, rental and specialty con- struction and irrigation and outdoor lighting solutions. Toro does business in more than 125 countries, with $2.5 billion in sales in fiscal 2017.
From left, Jody Christy, general manager of BOSS Snowplow in Iron Mountain, presents employees Korey and Val Carlson with the Everyday Hero Award from The Toro Company in recognition of the couple’s volunteer work with the Goodman-Armstrong Creek Rescue Squad in Wisconsin. Also shown are Justina Blazier and Katie Schinderle, co-giving ambassadors for BOSS Snowplow, and BOSS Controller Joe Jaeger.

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