Covenant News

NCP to Offer Health Savings Accounts

CHICAGO, IL (April 21, 2005) - National Covenant Properties (NCP) has begun offering Health Savings Accounts (HSA) that enable qualified people in High Deductible Health Plans (HDHP) to set aside funds pre-tax up to certain amounts as high as $5,250.

Individuals qualify if their deductible is at least $1,000 up to a limit of $5,100, which also would include out-of-pocket expenses. The limits for families are at least $2,000 up to $10,200,says David W. Johnson, president of NCP.

Medical expenses include doctor visits, prescriptions, transportation to medical care, and dental care. Also included are long-term care insurance and healthcare coverage when unemployed. The plan is available to those who are self-employed and people who obtain coverage through an employer.

The plan has several advantages, Johnson says. The HSA enables people to have lower premiums on their health insurance because of the higher deductible. At the same time, money set aside is earning interest.

Funds deposited in the account can be carried forward on a yearly basis. When used for qualified medical expenses, the money can be withdrawn tax free without penalties. People also may withdraw their money without penalty when they are 65 but must pay taxes, Johnson says. The accounts can be passed on to family members, he added. Those who withdraw money before age 65 to use for non-medical expenses will pay a 10 percent penalty.

"It's kind of like an IRA (Individual Retirement Account) in design and style," Johnson says. "Many financial advisors are predicting that what people will do is fully fund their HSA and to the extent that they can, pay for their deductibles with non-HAS dollars as much as possible. Then, they have a nest egg for retirement."

"The theory is you're not using up your full deductible every year," says Johnson, adding the plan is especially beneficial for younger people and the self-employed who are not expecting significant first-dollar medical expenses.

In addition to helping themselves, depositors also enable NCP to loan money to churches for new projects. Over the last two years, NCP has loaned an average of $45 million per year to churches, Johnson says.

For more information on opening an HSA, call 800-366-6273 or emailncp@covchurch.org.      

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