HSA MEC
A Powerful Way to Supercharge Your Health Share Plan
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Interested in contributing to a health savings account but you’re in a health sharing plan that isn’t HSA-eligible?
Then the HSA MEC may be the solution for you.
Until recently, it was impossible for most people to combine the benefits of health sharing with the tax benefits of contributing to a health savings account. At last, those days are over – thanks to HSA MEC.
Here’s why:
HSA MEC is an innovative, affordable HSA-eligible health insurance policy that you can purchase alongside your current health sharing plan.
When you add HSA MEC to your existing plan, you are immediately eligible to contribute or accept employer contributions to your health savings account.
This is important because these pre-tax contributions provide a tax benefit worth potentially thousands of dollars in the first year.
How It Works
1. Enroll in a health share plan.
- Note: You may already be enrolled in one! HSA MEC works with any health share plan, except for HSA SECURE.
2. Enroll in the HSA MEC.
- When you enroll, an HSA account will be established for you. It’s up to you (and possibly your employer) to fund it, though.
3. Contribute to your health savings account.
- And enjoy the many tax benefits that HSAs provide, both in the current tax year and in the future.
Ready to Enroll? Contact your Personal Benefits Manager, or schedule an appointment for a free consultation and enrollment assistance, or just go here to enroll online!
What is the HSA MEC?
The term “MEC” in HSA MEC stands for “Minimum Essential Coverage.”
Under the Affordable Care Act, “Minimum Essential Coverage” refers to the basic requirements for a health insurance policy to qualify as a high-deductible health plan under the Act.
Typically, these minimum essential coverages focus on things like preventative care and screenings.
The HSA MEC, offered through HSA For America, is a “limited value plan” that is specifically designed to provide these basic benefits, and also qualify policyholders to contribute to an HSA, all at the lowest possible monthly cost.
LEARN MORE: How Much Can an HSA Save in Taxes?
Note: To enroll in HSA MEC, you must own a business, be an independent contractor, or have verifiable self-employment income.
To enroll in HSA MEC, contact your Personal Benefits Manager.
If you’re not already an HSA For America client, we’d love to have you as one! It’s easy! Simply make an appointment for a FREE consultation with one of our expert Personal Benefits Managers.
HSA For America is the nation’s leading independent expert on health sharing plans and combining health sharing savings with the powerful tax advantages of health savings accounts.
Why contribute to an HSA?
- Tax Deductions on Contributions: Contributions reduce your taxable income, lowering taxes in the current year.
- Tax-Deferred Growth. No taxes on interest, dividends, or growth as long as the money remains in your HSA.
- Tax-Free Withdrawals for Medical Expenses: Withdrawals for qualified medical expenses are tax-free.
- Retirement Benefits: After age 65, there are no penalties on withdrawals. Withdrawals for medical expenses and certain long-term care insurance premiums are still tax-free.
How Much Can You Contribute to an HSA?
As of [year}, you can contribute up to $4,150 for self-only plans, and up to $8,300 for families.
Those aged 50 and over can make an additional “catch-up” contribution of $1,000 per year.
How Much Can You Save By Adding HSA MEC?
Let’s take a simple example: Let’s assume you are married and in the 33% federal income tax bracket. We’ll ignore state tax effects for now.
Suppose you sign up for HSA MEC. Depending on your age and other circumstances, your monthly premium may amount to about $75 per month, or $900 per year.
But by adding HSA MEC to your health plan, you now qualify to contribute up to $8,300 to your HSA.
That means you can reduce your taxable income by that same amount by contributing the maximum to your HSA. If you are in a 33% average tax bracket, that means you would realize $2,700.67 in federal tax savings in the current year.
At year end, when you file your taxes, your net tax benefit is $2,700.67 – $900.
Savings: $1,800.67.
That’s a pretty good 12-month ROI.
If you are over 55, you could save an additional $333.33, thanks to the additional “catch-up” contributions.
If both you and your spouse are over 55, you can save an additional $666.67.
That’s just the tax benefit in the very first year of maxing out your HSA contributions in the 33% tax bracket.
Enroll in HSA MEC – Step-By-Step
Enrolling in HSA MEC is simple! Here’s a guide to doing it yourself, online, in just a few minutes.
Note: HSA MEC is designed exclusively for business owners and self-employed individuals.
Step-by-Step Enrollment
Step 1 – Click on this link to be taken to the self-enrollment portal. Enter your Name, State, Gender, and Date of Birth.
Step 2 – Fill out the form with some basic information and your payment method. Make sure to select your desired effective date. Check the box that says you agree to the authorization, sign the box, and type your name at the bottom.
Step 3 – Click Submit to complete your enrollment.
If you get stuck at any point, or you have questions, don’t hesitate to contact your HSA for America Personal Benefits Manager directly. Or if you have not been assigned one yet, click here to make an appointment with one, who will be happy to provide any assistance you need at no charge.
I’m a Business Owner. Can I Offer This to Employees?
Yes! The HSA MEC works extremely well for small groups and even for larger ones. Especially if employees can afford to contribute significantly to an HSA, or if you are willing to contribute on their behalf.
Your contributions to employee HSA’s are fully tax-deductible as a business expense. The benefit is not taxable to employees. And you can also save money on the employer share of payroll taxes by making pre-tax contributions to your employees’ HSAs.
Health Insurance Instant Quote
HEALTH INSURANCE INFORMATION
- Plans approved and authorized under the Affordable Care Act
- Covers Pre-Existing conditions
- Low cost subsidized plans available to those earning
< 400% of the federal poverty level - Unlimited lifetime benefits
- Available during open enrollment (November 1 – January 15), or if you qualify for a Special Enrollment Period
How to Choose an HSA-Qualified Health Plan
HSA plans are simple and easy to understand. If you need some basic information on how Health Savings Accounts (HSAs) work, visit our HSA page.
A relatively small percentage of health insurance plans are HSA-eligibile. If you are looking at health insurance quotes through our quote engine, HSA plans will be noted.
While HSAs are typically associated with insurance plans, ColoHealth also offers a partially self-directed HSA combined with a healthshare program through MPowering Benefits. Health care sharing programs are not insurance; instead, they pay formedical expenses in a different way. Members pay monthly contributions, and that money is pooled together to pay for its members’ qualifying medical expenses.
Health share programs offer significant savings, one of their biggest appeals and one of the reasons why there are now more than a million people who have joined a health share program. However, they aren’t for everyone. If you have a pre-existing condition or are currently going to the doctor often, medicare cost sharing programs might not be the right fit for you.
When you are ready to choose a plan, follow the directions below. It usually takes no more than 10 minutes or so to choose the best plan for your needs.
1. Get an Instant Quote.
Our instant quote engine can rapidly show you the available plans in your area, so that you can get an overall feel of what premiums will be for the different HSA plans.
To see just the HSA health insurance plans, change the “Plan Type” on the Customize Search tab at the top of the page to “HSA”. Note that not all insurance companies and plans are available in all areas.
The healthshare program that works with an HSA is very attractively-priced, particularly if you do not qualify for a health insurance subsidy.
Get an Instant HSA Health Insurance Quote
Get an Instant HSA Healthshare Quote
2. Compare premiums/monthly contribution amounts.
This will quickly give you a feel for which companies are most competitive in your area.
3. You may want to consider adding an $100 deductible accident policy. Stand-alone accident plans can be viewed on our Accident Plans page. Because these accident plans are very inexpensive, you may be able to keep your premiums lower while greatly reducing your exposure for the type of claim you’re most likely to need your health insurance for – an accident.
4. With both health insurance and most health sharing plans you may want to check the insurance company’s PPO or HMO network to see which doctors and hospitals are considered in-network providers. The link to each plan’s PPO or HMO network can be found on that company’s page on our site.
Note that some healthshare programs do not use a network, and allow you to see any doctor of your choice.
How to Apply for Coverage
Applying for HSA health insurance and establishing an HSA is quick and easy. Most companies allow you to apply online. Or you may simply print out an application and fax it to us at 866-284-0082, or mail in your application to the address below.
Apply Online
The easiest and most efficient way to apply for an HSA plan is online through a secure online application. This will enable you to avoid the hassles of filling out a paper application and will speed up the process by instantly transmitting your information directly to the insurance company. The application usually takes about 10 minutes to complete.
You may apply online by running instant quotes, and apply online for most plans we offer right from the quoting system's results page. Or simply select the apply online link below for the plan you are interested in.
If you are interested in a healthshare plan, you can get a quote on the MPowering Benefits HSA-qualified health share plan, and apply online.
Mail or Fax an Application
You can download an application for the plan you are interested in, print it out, fill in all the required information, and then either fax it to us toll-free at (866) 284-0082 or mail it to us at the address below.
What Happens After You Apply
When you apply for a health insurance plan through Colohealth, we immediately submit the information. We monitor your application during the whole process, and keep you informed. We use our experience and connections to make sure your policy gets issued as quickly as possible. If any additional information is needed, we’ll let you know. We will inform you as soon as you’ve been approved, and make sure you’re happy with your coverage.
We're Here to Help
As you've probably noticed, our website is comprehensive and should answer most of your questions. However, if you need personal assistance, we are happy to help. Simply pick up the phone and call us, or if you are already in communication with one of our Personal Benefit Managers, you can contact them directly.
If you’re unsure, you may want to schedule a telephone consultation before you sign up for a plan. We will help you fully analyze all your options, let you know the pros and cons of the various plans you are considering, and give you our professional opinion about which plans will best meet your needs. We’ll then help you get enrolled with the plan you choose.
How to Establish Your Health Savings Account
Once you have applied, you'll want to go ahead and set up your Health Savings Account. You are not required to establish an HSA, but by funding the account as soon as possible you'll be able to take advantage of the tax deductions and tax-deferred growth HSAs offer.
To establish your HSA, follow the steps below:
- Choose the bank or trustee you would like to administer your HSA.
- Fund your account no later than April 15th for the previous year.
- Decide how you want that money invested.
- Decide on a strategy for when you’re going to make withdrawals (see the How to Maximize Your Tax Benefits section below).
How to Maximize Your Tax Benefits
An HSA plan is really a pretty simple concept. You have a high-deductible health insurance plan you hope to never use, but if something big does happen, it will protect your assets and cover your medical expenses. There are a few things that can make a big difference in how much money you spend and how much money you accumulate in your account.
There are basically three different strategies on how to fund your HSA.
- Put no money in the account, except when you incur a medical expense. This strategy allows you to legally "launder" any money used to pay medical expenses. In other words, by depositing money into your HSA, then immediately withdrawing it to reimburse yourself for medical expenses, you are making your medical expenses all tax-deductible. You may want to use this strategy if you are on a tight budget and want to keep your cash outlay as low as possible.
- Fully fund the account, or at least put in as much as possible based on your budget. Take money out of the account any time medical expenses are incurred, and let the rest grow tax-deferred. This strategy will maximize your tax deduction, while making your HSA funds available to pay any non-covered medical expenses before your deductible is met.
- Fully fund the account, but pay all medical expenses from a non-HSA account. Reimburse yourself for medical expenses at a later date. This strategy will allow you to maximize your tax deduction and the tax-deferred growth of your HSA. You can then reimburse yourself, tax-free, at any time in the future for medical expenses incurred over the ensuing years.
To maximize the potential growth of your funds, you may want to make your HSA deposits as early in the year as possible. Any growth in your account is tax-deferred, like an IRA.
Take Full Advantage of Your HSA
Don't forget that every time you fund your account you get an instant tax deduction. When you offset the tax savings against your premiums, your net cost for an HSA plan can be very low.
The maximum allowable contribution goes up every year with the Consumer Price Index. If you are contributing to your account for 2024, the individual contribution limit is $4,150, and the family limit is $8,300. In 2025, that limit is $4,300 for individuals and $8,550 for families.
Review your options.
Rate increases for plans happen only in January, so make sure to review your options every year during open enrollment to make sure they’re still the best choice for you. Even if you switch to a plan without an HSA, the account and money are still yours to use; however, you simply can’t contribute to it anymore until you’re under another HSA-qualified plan
Often, people keep their plan much longer than they should, and end up paying much more than they should. If your rates go up, you can compare a wide variety of plans on our Instant Quote System. If you have your coverage through ColoHealth, we automatically do this analysis of available plans for you any time we are notified of rate increases.
Whether you pick an HSA with an insurance plan or a health share plan, HSAs plans are a great way to protect yourself while saving tax-deferred money. If you have any questions or would like to review your options, reach out to your Personal Benefits Manager or give us a call. We’d love to chat and help you through the process.
Healthshare Instant Quote
HEALTH COST-SHARING INFORMATION
- Not health insurance, but a way for like-minded individuals to share medical expenses
- Waiting periods on pre-existing conditions
- May exclude sharing for certain conditions or activities
- Enroll any time
- Much lower monthly cost than unsubsidized health insurance