Zero Premium NC Health Insurance Plans

Well I bet the title got your attention!  You must be asking "please tell me more about these zero premium NC health insurance plans!"  Obviously, there is no such thing as a zero premium insurance plan...after all these companies have to bring in revenue to pay for claims. But for some there is a way that you can take advantage of the laws to work for your benefit and pay nothing or have a very reduced rate overall once everything is said and done.  Let me explain by example.

I recently had a prospect call that was looking to change plans and was inquiring about the pros and cons of a North Carolina health savings account. After explaining to him how all this works he decided that this made the most sense for his situation and we applied with a carrier for a $5000 deductible individual HSA qualified plan. Due to excellent health he was awarded best case rates and his monthly premium was $81 per month ($972 Annually). I know you are saying to yourself (and me) this is not a zero premium health plan.  Keep reading....

Lets look at the numbers and some things this guy has working for him.  First, he is self employed so he gets to write off 100% of his health insurance premiums on his taxes.  Because he is a relatively high income earner lets say for this illustration he is in the 25% federal tax bracket.  Also the NC tax bracket would be 7%. In addition, he has also set up his Health Savings Account (HSA) where he plans to contribute the annual maximum of $3,050.  This too is 100% tax deductible.  Here's how his numbers break down:

  • $972 x 32% = $311 in additional tax refund
  • $3,050 HSA contribution x 32% = $976 in additional tax refund
  • $1,287 in additional tax refunds

As you can see he is paying out $972 in annual health premiums but due to the tax laws he is able to increase his tax refund by $1,287.  In this situation he is making money.  In addition, he has $3,050 set aside in a health savings account to pay for over 60% of his annual deductible IF he needed to use it.

This was an example for a single individual. It's important to note that in 2011 if it were a family plan they can contribute up to $6,150 annually to the HSA.

Obviously not everyone will fall under this scenario and be approved at rates like these.  However, this is an example of some of the insights that you can get by working with a qualified NC health insurance agent to make sure that you are aware of all the opportunities out there.

Disclaimer:  I am not an accountant or a CPA.  Please consult with your CPA in regards to your particular situation. 


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