Health Savings Account Blog

Joining Rep. Cantor and House Speaker Dennis Hastert today was Carla Bender, a 12-year employee of Medtronic, Inc., who opened her health reimbursement arrangement (HRA) in 2002, and now saves approximately $1,000 per year in lower premiums. Carla echoed the intent of the Cantor bill by saying, "I'm glad I had the opportunity to choose how to manage my own health care, and the changes proposed in this bill will provide a further incentive for employees like me to do the same."

Early studies show that, while HSAs have enjoyed high adoption rates among the uninsured and small businesses, there seems to be a lag in adoption among employees of medium-to-large companies. For example, IBM has less than 2% of its employees enrolled in an Health Savings plan for 2005, with annual enrollment numbers for 2006 yet to be published.

Under current law, HSA contributions are limited to the amount of the deductible or the out of pocket limit, whichever is less. Also, individuals are not allowed to use flexible spending accounts or health reimbursement arrangements to pay for their out of pocket costs. The Cantor legislation will promote greater adoption of HSAs by lifting the "lesser of the deductible" limitation and allowing coordination of HSAs with flexible spending accounts and health reimbursement arrangements.

Comments from Coalition Members

Deere & Company

"The cost of health care continues to be a major concern for workers in the U.S. and the companies that they work for. Employees want assurance that they will have access to affordable health care," said Mert Hornbuckle, Vice President of Human Resources at Deere & Company. "We join today with other large employers in strong support of Congressman Cantor's HSA coordination legislation. HSAs will provide employees an opportunity to better manage their own cost of health care services and to save for unpredictable medical costs in the future."

Medtronic, Inc.

"HSAs and HRAs are working and gaining participation and acceptance with each year's enrollment," said Dave Ness, V. P. Global Rewards, Medtronic, Inc. "However, if they are to become the mainstream method of financing health care, we need to have more flexibility in determining plan design, contribution levels along with the ability to coordinate more between the two."

UnitedHealth Group

"In our work with an increasing number of large employers who are sponsoring more consumer-centric health plan designs such as HSAs, Definity Health supports initiatives that advance flexibility which ultimately encourage consumers to be more active in how their health care dollars are spent," said Kyle Rolfing, CEO of Definity Health. "We applaud Congressman Cantor's legislation which enables employers to provide their employees with optimal benefit options to address their health care needs in a meaningful way."

National Association of Manufacturers

"We commend and congratulate Rep. Cantor for continuing to work to improve access to Health Savings Accounts (HSAs)," said Neil Trautwein, National Association of Manufacturers Assistant Vice President for Human Resources Policy. "The only constant in benefit design is in its constant evolution. Rep. Cantor's bill will be a big part of building tomorrow's better HSA."

CIGNA HealthCare

"While today's HRA and HSA plan designs continue to evolve, the goal of these plans -- to enable consumers to have greater ownership of their health care decisions -- hasn't changed," said Michael Showalter, Vice President of Consumerism for CIGNA HealthCare. "The Cantor Flex HSA is an important step that will help consumers use these plans with greater flexibility, and allow companies like CIGNA HealthCare more opportunities for innovation in plan design to support the varying needs of today's employers and consumers."

America's Health Insurance Plans (AHIP)

"Our members welcome Congressman Cantor's leadership in working to improve access to health insurance," said Karen Ignagni, AHIP President and CEO. "This legislation will help expand insurance options for millions of Americans by allowing them to increase savings for health care expenses that might occur in the future and to integrate existing tax incentives and create a better system for consumers."

Background on Coalition

The Coalition on HSA Coordination was created in 2005 to examine the issues underlying the expansion and strengthening of HSAs. Recognizing the positive impact of HSAs on small businesses and the uninsured, the Coalition pairs the experience and leadership of many of America's medium-to-large employers and explores the potential for coordinating an employee's HSA with other consumer-driven health plans.

The goal of coordination is simple: to provide a full continuum of coverage through consumer-driven health plans such as Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), and Health Reimbursement Arrangements (HRAs). By allowing the employee to coordinate these accounts, he or she can reduce their total annual costs, saving both the employee and employer from double-digit increases in monthly premiums.