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Health Savings Accounts are officially recognized as a tax break for the rich
by Tony Novak, CPA, MBA, MT
, revised 11/16/11
Health Savings Accounts are one solution promoted by the Bush administration to attack on the current national health care crisis. Benefits advisers say that HSAs are primarily a tax break for a few wealthy people rather than a solution for the masses. Other articles by this author on the limitations of HSAs have been posted here and in other publications). This week Wisconsin Governor agreed with the advisers in vetoing a state tax credit for HSAs.
Governor Jim Doyle vetoed a bill that would have provided state income tax credits because it would have encouraged employers to reduce their current level of coverage and offer only policies with high deductibles that would burden middle income families; HSAs are viable only for persons with higher incomes; and the credit has no demonstrable economic benefit for the entire state.
The primary disadvantages of HSAs are: 1) not everyone qualifies for he benefit, 2) few tax-qualified health insurance plans are available, 3) the required health insurance is expensive, 4) enrolling often requires hiring an expensive adviser.
HSAs continue to an average federal tax benefit of more than a thousand dollars per year for the few who qualify and can afford the enrollment costs, but additional state income tax breaks might not forthcoming as originally expected.
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Opinions expressed are the solely those of the author and do not represent the position of any other person, company or entity mentioned in the article. Information is from sources believed to be reliable but cannot be guaranteed. Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues or a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. Tony Novak operates as an independent adviser under the trademarks "Freedom Benefits", "OnlineAdviser" and "OnlineNavigator" but is not a representative, agent, broker, producer or navigator for any securities broker dealer firm, federal or state health insurance marketplace or qualified health plan carrier. He has no financial position in any stocks mentioned. Novak does work as an accountant, agent, adviser, writer, consultant, marketer, reviewer, endorser, producer, lead generator or referrer to other companies including the companies listed in the articles on this web site.
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