by John Darer® CLU ChFC MSSC RSP CLTC
When settling personal injury or wrongful death cases, consideration should be paid to how future medical needs will be covered, even by those who have not suffered catastrophic injuries. For example, by the time a non-working surviving spouse and children receive a recovery, the 36 month COBRA extension may have been exhausted. Other limits apply to other situations. Health Savings Accounts may be a viable option.
Health Savings Accounts (HSAs) were created in 2003 so that individuals covered by high-deductible health plans could receive tax-preferred treatment of money saved for medical expenses. Generally, an adult who is covered by a high-deductible health plan (and has no other first-dollar coverage) may
establish an HSA.
Eligible United States tax payers will be able to contribute and deduct $3,250, individually (higher family limits) if they contribute the maximum amount to their Health Savings Account ("HSA") in 2013. The new limit was announced as part of Revenue Procedure 2012-26. In order to be able to take the deduction, a high deductible medical insurance plan must be purchased that meets certain requirements.