Despite the fact that health savings accounts have been around for awhile, there are still a lot of Floridians who don’t understand what they are and how they work.

In a nutshell, a health savings account, also referred to by the acronym HSA, is considered to be another option for "traditional" health insurance. Put another way, having an HSA lets you shell out money for current health bills and at the same time, save for the future for qualified medical benefits, and tax free retiree health expenses.

There is one thing that you need to be aware of here, and that is you have to have a high deductible health plan (HDHP) to be able to utilize health savings accounts. Don’t be too concerned about the costs of the high deductible health plan, as typically it is less expensive than your usual health care coverage. This is a real bonus because the money you save by having a high deductible health plan can be stashed away in your HSA.

Another very attractive feature of HSAs is the fact that "you" own and control the money in them. That means any decisions that need to be made about how the money should be spent, are solely up to you. There is no third party health insurer getting involved in how you manage your health expenses. In addition, you get to decide just what kind of investments you want to make with the money to grow your account.

Let’s take a quick look at just what a high deductible health plan is and does. First, you already know you must have one (HDHP) to open an HSA. Don’t be confused by the use of the term catastrophic health insurance, because it means the same thing as a high deductible health plan. You should know that the high deductible plan usually does not pay for the first several thousand bucks of expenses you incur. This is your deductible. Anything over that specified amount is covered. Having the HSA is a real benefit to you because it will help you pay for the things your plan won’t cover.

Before you make plans to buy an HSA, check to see what the minimum deductible happens to be for the high deductible health plan. For example, in 2008 it had to be at least $1,100 for single coverage and $2,200 for a family. For 2009, the max HSA single contribution is $3,000 and for a family it is $5,950. Any catch-up contributions for those 55 and older have been increased to $1,000 (and every subsequent year) by HSA.

There were also new amounts for your annual out-of-pocket expenses for the HDHP for 2009 for individuals of $5,800 and for families of $11,600. If you happen to have a high deductible health plan, you may also have first dollar coverage (meaning no deductible) for preventive care and thus be able to have higher out-of-pocket limits, etc.

For 2010 the figures have once again increased and the max annual for single HSA coverage will be $3,050 and for a family it will be $6,150. As far as HDHPs are concerned, for 2010 the max annual deductible for individuals will be $5,950 and for families $11,900.

When in doubt, ask questions about where you may sign up for your HSA and also ask about HSAs where you work, as the company may have a plan for workers. Just remember that you don’t "buy" an HSA because it’s a savings account. What you "do" buy, however, is the high deductible health plan.