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Consumers now able to take more control of health care expenses

Editor’s note: Welcome to Scott Carmack, new columnist for the NFH. Scott will address insurance issues – a hot topic in America today – in his column, which will be published each month in the second issue of the NFH.Scott has more than 20 years of experience in business development, financial strategies and insurance. He has helped develop and build companies in a wide range of industries, from medical to sports management. Scott also has provided families and individuals with expert advice on insurance and finance.He has a bachelor’s in management from Oklahoma City University and is a registered representative of State Farm VP Management.Scott is affiliated with many professional organizations and is heavily involved in the community. Scott has sponsored the Falcon and Peyton high school booster clubs, the State Farm MasterDrive scholarship, the High Plains Little League Baseball Organization and the El Paso County 4-H Club. He has just been elected president of the Falcon Education Foundation.Scott offices in Falcon, and he and his wife, Marcy, and their three children – Ryan, age 6, Rachel – age 4 and Haley – age 1 – have lived in the county for nine years.One interesting tidbit on Scott: He was born and raised in Calumet, a small town in western Oklahoma, on land that his family acquired in the 1889 land run. The Chisholm Trail and the old Rock Island Railroad both cross their property, and his office in Falcon now sits about 150 yards from the old Rock Island line that once ran through Falcon.Are you looking for a way to trim your health care costs, reduce your federal income tax liability and potentially save more for your future?As part of the Medicare Prescription Drug legislation signed into law in 2003, you may now be able to contribute to a Health Savings Account (HSA), which, when used in conjunction with a high deductible health plan, helps individuals save for qualified medical and retiree health expenses on a tax-free basis.The concept of HSAs is simple. First, to be eligible for an HSA, you must purchase a high-deductible health plan (HDHP). An HDHP is generally a plan that has an annual deductible of at least $1,000 for self-only coverage and at least $2,000 for family coverage. In other words, you pay for routine medical care like doctor visits, while insurance covers catastrophic medical expenses. Since you accept more of the expenses of your health care, your premiums will be substantially lower.This is where the HSA comes in. An HSA is a separate account into which you can deposit pre-tax dollars. In 2007, the maximum annual amount you may contribute to your HSA is $2,850 for individuals and $5,650 for families. If you are age 55 by the end of the year, you may contribute an additional $800. Medicare enrolled individuals cannot contribute to an HSA.Anyone may contribute to an HSA on behalf of an eligible individual – you, your employer or anyone. Your contributions and the contributions of others are tax deductible, and, if your employer chooses to contribute, those contributions will be deductible by your employer and not included in your income.All earnings in an HSA are tax deferred and distributions are tax free if used for qualified medical expenses, including long-term care premiums. This allows you the opportunity to pay for your medical expenses with pre-tax dollars. In addition, any unused HSA funds may be withdrawn after you turn age 65 with no penalty; the funds will be taxed as ordinary income.HSAs are portable, with rollover provisions, allowing you the opportunity to move funds from one HSA to another. If you obtained an HSA through your employer and change jobs, you can roll over your HSA into a new HSA and take the funds with you.Any money not used in the year can remain in the HSA and continue to grow tax-deferred – it’s NOT a “use it or lose it” type of account.Essentially, an HSA can be an effective financial tool, particularly for those who are small business owners, uninsured or under-insured or anyone facing the challenge of affordable quality health insurance coverage.In this day of sky-rocketing health care costs, an HSA has become a smart move for many consumers.Scott Carmack, State Farm AgentScott Carmack Agency7495 McLaughlin Road, Suite 200Falcon, Co. 80831719-495-9515;

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