Affordable Health Insurance

Health Savings Accounts are attractive because contributions to these accounts are tax deductible on federal income tax returns. The choice of making Health Savings Account (HSA) deposits deductible on state tax forms is left up to each state. Almost all states have chosen to follow the federal example on this and Wisconsin is the latest state to adopt that legislation beginning with the 2011 tax year.

Individual coverage health plans that can be combined with an HSA have a deductible of at least $1,200. Family HSA plans have deductibles starting at $2,400. These high-deductible plans usually cost much less than co-pay plans, which don’t require policyholders to meet a deductible.

Once Health Savings Accounts are funded, they can be used to cover the deductible. Since HSA contributions are tax deductible, both the premium and tax savings can be channeled into the HSA.

Forty-seven states allow residents to take a state tax deduction for a Health Savings Account. Wisconsin officials estimate that residents, on average, will save around $168 per person each year with the change.

Some legislators opposed the bill and estimated that lost tax revenue would grow to around $49 million in a couple of years. However, Governor Walker said the tax deductions were necessary and promised to show how the cuts would be paid for when the new state budget is ready.

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