Health Savings Account Blog: January 2007 Archives

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January 30, 2007

Statistics on Health Savings Account Pool

Early critics of Health Savings Accounts worried adverse selection of young, healthy workers would destroy traditional risk pools. Yet there is no evidence that Health Savings Accounts attract a disproportionate number of young people, says John Goodman, president of the National Center for Policy Analysis.

When adjusted for retirees who were not eligible, a recent Government Accountability Office (GAO) report of government workers found those joining HSA plans were about the same age as enrolling in more traditional plans.

Two additional GAO reports came to similar conclusions. A recent survey by the health insurance industry trade group found adult enrollees evenly distributed with nearly one-quarter between the age of 40 and 49 and one quarter above that age group and one-quarter below.

Time/Assurant Health (formerly Fortis) reported on its enrollees with Health Savings Accounts in 2005. It found:

- Nearly one-third (30 percent) had less than $50,000 annually in family income.

- About 44 percent had previously been uninsured shortly before obtaining an HSA.

- More than half (61 percent) were older than age 40.

- More than two-thirds (69 percent) were families with children.

A study in the Annuals of Internal Medicine found enrollee satisfactions is not related to quality. In fact, this phenomenon is not uncommon among consumer goods. Satisfaction is generally more closely related to good communication and met expectations, says Goodman.

Moreover, surveys where enrollees rate their Health Savings Account lower than managed care may be sampling unrepresentative enrollees or people who perceived they've lost benefits when switched to a full-replacement HSA plan. Or it may point to the need to have better consumer education about the merits and uses of HSA plans in addition to greater price transparency, says Goodman.

Source: John C. Goodman, "Statement on Consumer Driven Health Care: Testimony Before the Senate Health, Education, Labor and Pensions Committee," National Center for Policy Analysis, January 10, 2007; and "Who's Taking Advantage of Health Savings Accounts (HSAs)?" Assurant Health, 2006.

Posted by Wiley Long at 08:35 AM | Comments (0)

January 28, 2007

Aetna Introduces New Health Savings Account Options in Colorado

Aetna is offering two high-deductible Managed Choice plans that are compatible with the Aetna HealthFund Health Savings Account (HSA). These plans offer members lower premiums in exchange for higher annual deductibles, along with the advantage of an HSA. HSAs are tax-advantaged accounts used to pay for qualified medical expenses. HSA contributions are tax deductible and earn interest tax free. HSAs are portable, and unused balances can be carried forward from year to year, allowing consumers to plan and save for future health care expenses.

For those individuals on limited budgets who are able to purchase only the essentials, Aetna offers two "hospital" plans, which provide members with lower priced coverage for basic health care services. These plans provide limited coverage for preventive care – including gynecological, well-child care and physical exams – as well as inpatient hospital coverage coupled with limited benefits for outpatient surgery, skilled nursing or home health care services.

Members have the option to enroll in the Aetna Advantage™ Dental PPO Max Plan at the time of their medical election. The Dental PPO Max Plan allows members to receive quality dental care from participating dentists and nonparticipating dentists. Participating dentists have agreed to provide services at a negotiated rate for both covered services as well as noncovered services such as cosmetic tooth whitening and orthodontic care. This means members generally pay lower out-of-pocket costs.

Learn more about Health Savings Accounts at: http://www.health--savings--accounts.com

Posted by Wiley Long at 12:06 PM | Comments (0)

January 25, 2007

President Bush's Health Savings Account Proposal

Health Savings Accounts may not be at the forefront of President Bush's proposal for health care reform this year, but he has not forgotten them.

During his State of the Union address Tuesday night, Bush outlined his plan to expand access to health insurance. The centerpiece is a standard tax deduction of $7,500 for individual policies and $15,000 for a family policy, regardless of how much the coverage cost or whether people buy it through work or on their own. Any amount over this threshold would be subject to tax.

This policy, experts say, could fuel interest in Health Savings Accounts, which Bush touted in his State of the Union address a year ago as a way to control rising health care costs and make health insurance available to more people.

HSAs are savings account, funded with pretax dollars, to pay for medical expenses. They are coupled with high-deductible health insurance policies that carry low annual premiums.

HSAs generally attract wealthier people and younger, healthier ones who don't want to shell out a lot for premiums and are willing to take the risk of paying more out-of-pocket if they get sick.

The tax deduction helps HSAs because it encourages people to keep their premiums low because they don't want to exceed the threshold and pay tax or because they want to get the maximum savings from the deduction.

"The incentive is there to purchase lower-cost coverage," said J.D. Piro, a principal at Hewitt Associates, a consulting group.

For instance, people may be more willing to buy a family policy for $8,000 annually, rather than $12,000, because they will still get a tax deduction worth $15,000, said Greg Scandlen, president of Consumers for Health Care Choices, which supports HSAs. The standard deduction removes the motivation to buy higher-cost plans.

Also, within a few years, the average annual premium will likely exceed the deduction, driving people to find lower-priced plans to avoid paying taxes on the excess cost.

Interest in HSAs, which were created in 2003, is growing. There were about 1.2 million HSA accounts in July, up 43 percent from January, according to Inside Consumer-Directed Care, a biweekly industry newsletter. The accounts held $1.5 billion in July, up 54 percent from six months earlier.

Last year, at the president's urging, Congress increased the amount that could be socked away in HSAs. In 2007, a person can contribute $2,850 if he or she has an individual policy and $5,650 for a family.

To be eligible for an HSA, a person's health insurance plan must have a deductible of at least $1,100 for an individual policy or $2,200 for a family plan.

Learn more about what a Health Savings Account can do for you at: http://www.health--savings--accounts.com

Posted by Wiley Long at 09:15 AM | Comments (2)

January 23, 2007

The Coming Health Savings Account Revolution

Millions of Americans have joined the Health Savings Account (HSA) revolution which allows individuals to manage some of their own health care dollars through medical accounts they own and control. Through HSA plans, they are able to tailor their health benefits to more closely meet their own needs, thus profiting from being wise health care consumers, says Devon Herrick, a senior fellow with the National Center for Policy Analysis.

A further benefit of HSA health plans is that when patients control more of their own funds, many will demand new and better services. Increasingly patients in HSA health plans can:

- Check information on medical treatments and physician prices online.

- Seek out innovative medical providers like walk-in retain clinics, and physicians that offer e-mail or phone consultations.

- Work with Internet-based disease management programs that e-mails updates to an attending physician.

- Compare drug costs and therapeutic substitutes online in search of a better deal.

- Adopt health behaviors based on incentives from health insurers and compare hospital quality benchmarks prior to surgery.

The health care marketplace is just beginning to meet these challenges. Innovative health plans which utilize an HSA can facilitate many of these new services as a way to attract empowered patients, says Herrick.

Learn more about Health Savings Accounts at http://www.health--savings--accounts.com

Posted by Wiley Long at 09:12 AM | Comments (0)

January 21, 2007

2006 Tax Relief Promotes Health Savings Accounts For 2007 Forward

As one of its last actions of 2006, Congress passed the Tax Relief and Health Care Act of 2006. No public policy area is more important or more in need of reform than the nation's health care system. This act makes some small but important changes that make health savings accounts easier to open and fund. Further improvements to health savings accounts will pay great dividends to all of the participants in America's health care system.

Health Savings Accounts offer lower premiums, and incentives for consumers to stay healthy and save money for future medical expenses. They also encourage more competition among healthcare providers. And as everyone knows, more competition inevitably leads to lower prices and higher quality. However, there are political opponents who say that HSAs will only be used by the healthy, wealthy, and young.

This criticism doesn’t appear to have much traction when we look at the statistics. People of all ages and wealth levels are choosing HSA plans, and there does not appear to be any separation in the group market based on health status. But to appease these critics and make HSA plans even better, we should do more to enhance personal accounts to help the sickest and those with ongoing medical conditions. Substantially higher contribution limits to cover both deductibles and out-of-pocket expenses would help those with medical conditions requiring permanent or prolonged care. HSA account balances would be more likely to grow and would offset the expected higher future expenses as these individuals age.

When people with ongoing health problems are participants in their own care, they become managers instead of just patients. HSAs will give them more incentives to pay attention to diet and to the costs of their tests and treatments, and to all their alternatives – something a hired physician just can’t do. Individuals alone should have the right to make their healthcare decisions. Instead, too many people are limited by their insurance company’s restrictions or government mandates. HSAs remove restrictions, giving people the power to control their own healthcare in a much more powerful way.

It is my hope that the new Congress will be able to work together to achieve solutions. Because HSAs offer the best solution yet to lower healthcare inflation and the cost of health insurance, both sides of congress should support efforts to expand access to these accounts, particular to those with chronic health problems.

Visit our website (http://www.health--savings--accounts.com) for more information on how a Health Savings Account can help you.

Posted by Wiley Long at 11:04 AM | Comments (0)

January 19, 2007

How to manage a Health Savings Account

Health savings accounts are looking more attractive. The accounts allow consumers with high-deductible insurance plans to avoid taxes on contributions, investment growth and withdrawals as long as the money is used for qualified medical expenses. Still, crunching the numbers shows that it would be quite difficult to use an HSA to foot your entire health-care bill in retirement. But with enough planning, you could use it to pay for a significant chunk of your health insurance tab.

Making projections

Most people don't realize how much money they could need to fund their retirement health-care costs. Despite the fact that Medicare pays for many health costs for seniors, someone who retires today at 65 and lives 20 more years could need $84,000 to $164,000 to pay for uncovered medical expenses, according to a report by the nonprofit Employee Benefit Research Institute released earlier this year. And that's not counting long-term care costs.

How much you'll need depends heavily on how high your out-of-pocket drug costs will be. (That $164,000 figure assumes high drug costs.) The money will go toward paying premiums for Medicare Part B, which covers physician and outpatient care, premiums for a standard Medicare prescription-drug plan, out-of-pocket prescription-drug costs not covered by that plan and a supplemental insurance plan for other uncovered expenses. Bear in mind that today's $164,000 estimated costs will likely rise substantially for future retirees, according to the EBRI.

Beginning next year, you must have a qualified high-deductible health-insurance plan with a deductible of at least $1,100 for an individual, or $2,200 for families to open a Health Savings Account. An individual will be allowed to contribute up to $2,850 a year to the account; for families, the limit is $5,650. Before Congress passed its changes this month, your contributions couldn't exceed the amount of your deductible.

Even with that adjustment, the contribution limits can be a snag. Here's why: Suppose the government increases the $2,850 limit by 2.5 percent annually, and the money in your HSA realizes a 5 percent return each year. To amass around $164,000 before you turn 65, you couldn't be older than 41 or 42 this year, based on an analysis using EBRI formulas, and even then that amount might not be enough because health-care inflation could well drive the goal figure much higher.

This analysis assumes the HSA holder has a qualified insurance plan every year and contributes the maximum amount annually. This person also doesn't spend any of the money before age 65. The EBRI says today's 55-year-olds who retire 10 years from now and have high drug costs could actually need about $298,000 from age 65 on, factoring in health-care inflation.

Maximizing an HSA

Yet an HSA, when used properly, has a big advantage over a 401(k), in which funds are taxed when they're withdrawn. Depending on your tax bracket, you could have to accumulate some $252,000 in a 401(k) for those funds to be equivalent to $164,000 in non-taxable funds for health costs in an HSA.

Once you're 65, you can also use HSA savings for non-health expenses without penalty. Those withdrawals are simply taxed as income, much like a 401(k).

To maximize your HSA, start young. Contributing regularly will get you a lot further if there are decades to do it. And, even though you're allowed to spend your HSA on health expenses before retirement, try to cover those costs with other funds.

By leaving the money in your HSA, you can accumulate interest and investment returns that will not be taxed later, assuming you ultimately spend the money on health expenses. If, instead, you spent your HSA money on present-day health expenses and saved after-tax dollars, the growth of those savings would in many cases be taxed, reducing their overall value.

The temptation to spend the money now, though, can be tough to resist. The high-deductible insurance plans that are paired with HSAs can expose consumers to significant costs before coverage kicks in. It probably doesn't make sense to go into credit-card debt, for instance, for the sake of leaving money in your HSA.

But consider a 41-year-old who could build up that $164,000 by saving the maximum amount each year. If that same person took $1,000 a year out of her HSA, she would wind up with only about $125,000, according to an analysis using EBRI formulas.

Healthy Savings

You can use our online HSA calculators to help predict how big your health savings account will be years from now, depending on your annual savings rate, the number of years you contribute and other factors.

Posted by Wiley Long at 09:02 AM | Comments (0)

January 17, 2007

Health Savings Accounts are Part of the Answer to the Healthcare Crisis

There are some serious problems in America's current health care system. No one can argue that point. However, our politicians seem to have a difficult time acknowledging the real problems we face. For some reason, Washington thinks that our only health care problem is the number of uninsured, and once that's fixed then everything will be fine. Just give every citizen health insurance and the healthcare problems will vanish. Unfortunately, that is just not the case, but Health Savings Accounts can help.

What Washington doesn’t realize is that there are numerous problems facing those of us who have insurance, and those problems should be addressed first before insuring everyone else. Otherwise, you just add to the problem. Why give someone faulty health care. So I have included a few tips, in simple terms for our politicians, on how to fix America’s healthcare. First, the little things:

Ban drug company advertising for prescription drugs. This was a huge mistake by Congress. Why do people need to know about prescription drugs? Isn’t that what doctors go to school for? It may seem like a good idea on the surface, but what it does is create unnecessary visits for things that aren’t necessarily problematic. For example, a recent commercial says "talk to you doctor if you’ve ever had problems sleeping". Well, who hasn’t had problems sleeping? Now, patients are making appointments for things that aren’t pathologic but are rather normal human variations in health. The result: costs go up and access to care goes down. Not to mention the fact that drug companies are better spending this money on other things like research and development.

Impose strict malpractice reform. Trial lawyers must be reigned in. They are out of control and they are ruining our healthcare system. The fear of being sued among physicians is driving us to practice defensive medicine. Labs, tests and scans are being ordered mainly as cover, even when they aren’t exactly necessary. This drives up costs. And since it’s usually the lower socioeconomic class that tends to be sue happy, they obviously can’t afford the extraneous tests, and the cost gets passed to other consumers. Plus, malpractice insurance is becoming too expensive and it’s driving physicians out of practice, thus increasing demand for care and limiting access. We need to impose caps on damages and harsh penalties on plaintiffs attorneys who file frivolous suits, including forcing them to pay ALL court costs (including the defense) for any suit they lose. Do this, and malpractice lawsuits will drop substantially.

Stay away from socialized medicine. This simply doesn’t work in a capitalist environment. It’s way too expensive and will bankrupt the federal government. What would happen if healthcare were free for everyone? Long lines, poor quality, limited access and huge taxes. It’s not the answer.

Keep Health Savings Accounts. Luckily, Congress passed this before disbanding. Basically, this allows people to save money, untaxed, for healthcare reasons while purchasing a high-deductible health insurance policy for the big costs. It’s a great idea and I hope the new Congress doesn’t sink it.

Lower taxes on corporations. We have free trade with many countries. The problem is that the taxes here are higher for corporations than they are oversees. The result is the outsourcing of jobs and the loss of health coverage. In order for free trade to work for us, we need to lower corporate taxes to attract more international business and keep domestic business here. That means more jobs are created and more people are insured.

Allow small business to pool their resources and purchase large corporate policies for their employees. Why hasn’t this been done yet? Likely because the insurance lobby is awfully powerful. Small businesses simply don’t have the income to provide quality insurance for their employees, mainly because purchasing plans for a dozen people is too expensive. The larger companies get discounted care because they bring in more customers. It’s not exactly fair, but that’s how private insurance works. Hey, they have to pay their own bills. So, why not let small businesses come together under one plan? Where is the hangup here?

Allow physicians to practice concierge medicine. Dr. Vic Wood of West Virginia offers patients unlimited primary and urgent care for $83 a month. UNLIMITED. This doesn’t cover hospitalizations, medications or specialist care, but at least it’s something. It certainly beats an $800 ER bill for a sinus infection. Doctors can do this and still make a living, and it helps ease the uninsured burden. Similar plans can be found throughout the country. The Family Practitioners have found a way to help people who need help. So what’s the problem? Well, in some eyes, this amounts to operating as an illegal insurer. Who’s complaining? The insurance companies. This method eliminates the middle man thereby taking away from insurer profits. So they have to respond with lower rates themselves. Such is the world of free enterprise and healthy competition. It’s good for the consumer. But the insurers are winning the fight and many docs are not able to provide this service for legal reasons. In fact, insurance companies are pressing state legislatures nationwide to impose regulations on these retainer fees that private docs charge. This must not be allowed. People need the care, so what if it means the private insurers have to work a little harder to compete with the docs. It’s about time we gave doctors the upper hand and more say in American healthcare.

Learn more about what a Health Savings Account can do for you at: http://www.health--savings--accounts.com

Posted by Wiley Long at 08:37 AM | Comments (0)

January 15, 2007

How To Make Your Health Savings Account Work For You In Retirement

Health savings accounts are looking more attractive, but they still may not be powerful enough to cover all of your health care costs in retirement.

Beginning next year, you must have a qualified health-insurance plan with a deductible of at least $1,100 for an individual, or $2,200 for families to open a Health Savings Account. An individual will be allowed to contribute up to $2,850 a year to the account; for families, the limit is $5,650. Before Congress passed its changes this month, your contributions couldn't exceed the amount of your deductible.

Once you're 65, you can also use HSA savings for non-health expenses without penalty. Those withdrawals are simply taxed as income, much like a 401(k).

Learn more about HSAs at: http://www.health--savings--accounts.com

Posted by Wiley Long at 10:23 AM | Comments (0)

January 13, 2007

Health Savings Accounts and Your Taxes

Health Savings Accounts have a "triple" tax advantage from a federal tax standpoint. Individuals receive full tax advantages for their Health Savings Accounts on their Federal Income Tax return (or through a salary reduction program in certain employer-sponsored settings) regardless of particular state's tax treatment of Health Savings Accounts.

In fact, only 4 states do not allow tax deductions for Health Savings Accounts... Alabama, California, New Jersey, and Wisconsin.

An account beneficiary may take an above-the-line deduction (i.e. the amounts may be used to determine the individual’s adjusted gross income before any itemized or standard deductions are considered) for contributions made to an HSA during any month of the individual’s taxable year that the individual is eligible. The permitted deduction cannot exceed the sum of the “monthly limitations” for such months. Here are the 2007 limits:

- For those with single coverage, the maximum amount is $2,850.

- For those with family coverage, the maximum amount is $5,650.

Funds in an HSA grow on a tax-deferred basis, and distributions from an HSA are tax-free so long as the funds are used for qualified (as defined by Section 213d of the IRC) health care expenses.

How does state tax treatment of Health Savings Accounts differ from federal tax treatment?

HSAs (and the enabling legislation) are federal. As a federal program, each state decides whether to: a) comply with the federal guidelines, or; b) establish their own state guidelines regarding the tax treatment of HSAs. As a result, some income that may be tax-free at the federal level may not be tax-free at the state level.

Many states harmonize their tax treatment with the federal government. Those states include Arizona, Arkansas, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Iowa, Indiana, Kansas, Kentucky, Louisiana, Maryland, Missouri, Mississippi, New York, Montana, Nebraska, New Mexico, Oklahoma, North Carolina, North Dakota, Pennsylvania, South Carolina, Oregon, Rhode Island, Virginia, Utah and Vermont.

Other states, however, treat HSAs differently from the federal government, at least for tax purposes. The following states have indicated that legislation must be passed at the state level before HSAs receive a tax benefit at the state level: Alabama, California, New Jersey, and Wisconsin. New Hampshire and Tennessee do not tax income, but do tax dividends and interest.

See where all the states stand on the Health Savings Account issue: http://www.health--savings--accounts.com/state-income-tax.htm

Posted by Wiley Long at 11:24 AM | Comments (0)

January 11, 2007

Voluntary Insurance Complements a Health Savings Account

A growing number of consumers believe Health Savings Accounts (HSAs) offer the right prescription for comprehensive health coverage. A recent survey of 1,000 Americans suggests potential growth for HSAs, providing more Americans become aware of the new accounts.

Because an HSA may require time to grow to pay out-of-pocket expenses, consumers will sometimes turn to other types of insurance to supplement an HSA. For some, voluntary insurance policies are the missing piece in their coverage.

Voluntary insurance policies can help strengthen primary health plans by providing cash benefits directly to the policyholder to cover out-of-pocket costs such as deductibles and loss of earning power.

Supplemental Accident Plans offer HSA-compatible coverage that can benefit a consumer in a number of ways, such as:

• Alleviating concerns that the HSA may not have enough money to cover out-of-pocket expenses such as deductibles, co-payments and other costs

• Giving the policyholder the option of not dipping into the HSA, thereby maximizing its benefits and allowing the account to grow for future needs

• Providing money that is paid directly to the policyholder, enabling him or her to choose how best to use it (e.g., living expenses such as mortgage, etc.)

• Improving employer relations and retention.

Even when medical expenses are covered through an individual's medical plan, loss of income and non-medical expenses can have a major financial impact. Regardless of major medical coverage, Supplemental Accident plans provide money paid directly to the policyholder to use any way he or she chooses.

Experts say voluntary insurance policies may be used to supplement the missing indispensable piece of a Health Savings Account.

Posted by Wiley Long at 12:55 PM | Comments (0)

January 09, 2007

Health Savings Accounts Insurance's New Wave

For more than a dozen years, National Center for Policy Analysis president John Goodman has been touting tax favored Health Savings Accounts (HSAs), achieving only modest success before the Bush administration embraced the concept and the GOP-controlled Congress in 2003 paved the way for insurers to offer such plans, says Christopher Lee in the Washington Post.

Now the HSA dividends are beginning to pay off:

- About 3 million people are already enrolled in the new Health Savings Account plans.

- Another 3 million are in similar plans in which employers contribute to tax-favored medical spending accounts for their workers.

- A recent RAND Corp. survey found that employers reported saving at least 10 percent on health costs, and plan participants appeared to trim health spending between 2 and 15 percent.

Sen. Charles E. Grassley (R-Iowa), who, as chairman of the Senate Finance Committee, supported the 2003 legislation that cleared a legal path for the new plans, said that he was a convert to the idea years before, in part because of Goodman's tireless advocacy campaign.

"It was a long slog, but he made it and it paid off," Grassley said. "I think it's going to be one of the big directions that health care is going to move in."

And that change in direction couldn't come at a better time, says Goodman. "We are on a health-care spending path that's unsustainable," he said. "Someone is going to have to choose between health care and other uses of money. If you want someone else to make those choices for you, you can join an HMO. But if you want to make those choices yourself, Health Savings Accounts give you the financial ability to make them."

Visit http://www.Health--Savings--Accounts.com for more information on Health Savings Accounts and HSA qualifed health insurance plans.

Posted by Wiley Long at 09:25 AM | Comments (0)

January 07, 2007

2007 Predictions for Health Savings Accounts and Health Care Benefits

Expecting new regulations and an increasing need for cost control to lead to greater employee responsibility for choosing and financing benefits, Watson Wyatt has released the following health care benefit predictions for 2007:

- Increased focus on high-deductible health plans (HDHPs) coupled with Health Savings Accounts. One-third of large employers surveyed by Watson Wyatt plan to incorporate an HDHP with a Health Savings Account in 2007. However, few employers appear to be completely replacing their current plans with a Health Savings Account.

- More benefits information and tools online. Web-based systems allow employees to model the best choices for them, and many allow plan participants to pick the best provider by reviewing online report cards grading the quality of care.

- Moving beyond mandatory generic prescription drug plans. As more popular prescription drugs come off patent in the next three years and their prices are reduced, employers will loosen their requirements that employees use generic drugs whenever possible.

- Greater integration between health care and absence management programs. Coordinating such programs will grow in popularity as employers seek to improve employee health and productivity.

- More on-site clinics in the workplace. To ease access to appropriate health care, more and more companies will open on-site clinics.

Visit http://www.Health--Savings--Accounts.com for more information.

Posted by Wiley Long at 09:57 AM | Comments (0)

January 05, 2007

Health Savings Account Adimistrators Will Help Improve Healthcare

Financial leaders have begun to investigate how to use their transaction expertise to transform another industry: healthcare. While bringing their own houses to an unprecedented level of automation, financial institutions have long cast a covetous gaze at healthcare's inefficient billing, collecting and reimbursement. Now, as the employer-based health insurance model continues to deteriorate, consumers are shouldering an increasing percentage of costs and having a growing role in healthcare decision-making. Health Savings Accounts are playing a major role in this transition.

Such consumer engagement means the healthcare sector is paying closer attention to goals such as transparent pricing, standardized quality measures and electronic medical record-keeping.

But as mass media outlets focus on skyrocketing premiums, they’ve largely missed a strong underlying shift--that financial institutions may soon wield heavy indirect influence in healthcare through their custodianship of Health Savings Accounts.

Their first priority will be to digitise medical records. And if payments to the doctor is conditional on his having electronic medical records, all doctors will fall in line very quickly!

HSA owners will continue to benefit from this movement toward healthcare responsibility. Visit HSA for America to learn more about Health Savings Accounts and how you can take advantage of all the benefits they offer.

Posted by Wiley Long at 09:10 AM | Comments (0)

January 03, 2007

Health Savings Accounts Taking Hold

Unbridled health-care costs are partly responsible for the fact that the number of uninsured in the U.S. now tops the population of Spain. It is also why many companies are turning to "consumer-directed" or "consumer-driven" health plans such as Health Savings Accounts, says Brett Brune in the Houston Chronicle.

Here are his findings:

- A recent Mercer survey of 3,000 U.S. employers showed that the number of Health Savings Account plans tripled in 2006.

- They reduce the annual cost per employee by about $1,000, compared with a managed-care plan such as a PPO or an HMO, Mercer's data show.

According to Steve Swanson, a principal at Mercer Health & Benefits, smaller employers have been the first to catch on, mainly because they tend to be the most affected by health care cost increases.

But larger employers are beginning to take notice now as well. Houston's largest, the Houston Independent School District, has offered two Health Savings Account options for the last three years, with excellent results:

- Before the consumer plans were added, HISD's annual heath benefit cost per employee was about $5,500.

- At that time, it had predicted the annual health benefit cost per employee would rise above $7,000 in 2005.

- But as a result of the change to HSA plans, cost per employee was only about $5,770 this year.

Learn more about Health Savings Accounts at http://www.health--savings--accounts.com

Posted by Wiley Long at 10:29 AM | Comments (0)

January 01, 2007

Health Savings Account: How You Can Save Money with and Profit from It

A Health Savings Account (HSA) by definition, according to the Treasury Department, "is an alternative to traditional health insurance; it is a savings product that offers a different way for consumers to pay for their health care." And it is created to help you "pay for current health expenses and save for future qualified medical and retiree health expenses on a tax-free basis." That is, an HSA allows you to set side certain amount of pre-tax money each year so you can use the money to pay for the medical expenses that are currently not covered by your insurance plan or during retirement.

To qualify for a HSA contribution, however, you must have a High Deductible Health Plan (HDHP) which has the following deductible limits:

- Self-only coverage: $1,100
- Family coverage: $2,200

If you meet the above limits, you are eligible for an HSA and can make annual contribution that doesn't exceed the health insurance deductible. Since the contribution in HSA is tax deductible, participating in HSA can save you money on taxes by reducing your taxable income by the same amount. What's more, the contributions in HSA can be invested in the same way as you make IRA investments into stocks, bonds, mutual funds, and CDs. Therefore, if you can select a HDHP and contribute the annual limit into a HSA without really using it (i.e., you still pay the medical expenses out of your pocket and let the money in HSA grow tax-deferred), it will be "a tax-free way to help you build savings for future medical expenses." Last Friday, a Reuters article outlined several ways to get the most from a HSA:

- Load it to the max. For 2007, you're allowed to put away as much as $2,850 for single coverage or $5,650 for family coverage in your HSA account, even if your policy's deductible is less than that.

- Invest it. Treat the money in your HSA as a long-term investment.

- Pay out of pocket for your health-care costs and don't use the HSA money unless you absolutely must so you can build a HSA nest egg for retirement when you need it the most.

- Push your employer a little. See if your employer can offer HSAs by simply moving money from existing Flexible Spending Account or Health Reimbursement Accounts into an HSA.

- Make a full contribution in your first year. Even if you establish a HSA late in the year, you can still make the full deduction.

- Pass on the IRA transfer. You can one-time transfer from the IRA to an HSA, up to the maximum HSA contribution for that year.

For more information (eligibility, limits, penalty, ect) on Health Savings Accounts, visit http://www.health--savings--accounts.com to find the providers in your area.

Posted by Wiley Long at 07:13 PM | Comments (0)