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May 01, 2009
Are Health Savings Accounts the Right Tool for You?
Health Savings Accounts might not be for everyone, but for the right individuals and businesses, they are a way to control health insurance costs.
The use of Health Savings Accounts and high-deductible health insurance policies can reduce costs by 20 to 30 percent, Cris Ruiz told about 50 human resource managers and others at a meeting sponsored by UMB Bank.
Ruiz is vice president of UMB Healthcare Services in Kansas City. The UMB division acts as an administrator for Health Savings Accounts.
Businesses and individuals have to meet certain requirements to use Health Savings Accounts, Ruiz and Dennis Triplett said. Triplett is CEO of Healthcare Services.
For example, they said, a federally qualified high-deductible health insurance policy must be offered with Health Savings Accounts, the person must not be covered by other insurance, and limits are set on contributions to Health Savings Accounts.
The benefits of Health Savings Accounts: They are portable, meaning an employee has access if he changes jobs or becomes unemployed. There's no "use it or lose it" provision, as there is for flexible spending plans. The money in the account can be invested in different ways.
Triplett said that about 6.1 million Health Savings Accounts existed at the end of 2007. He expects that number to be about 8.5 million in a report expected in the near future.
Susan Smith of Gossen Livingston Architects said her company is offering Health Savings Accounts for the first time. She expects 10 to 20 percent of the company's 75 employees to choose an HSA over a traditional plan.
That's about what can be expected in the first year, Ruiz said.
Communication -- and lots of it -- is vital if employers want to successfully offer Health Savings Accounts, she said.
Employees and employers must understand how Health Savings Accounts work and must have tools to evaluate which option is best for them. And they should be viewed as a long-term solution, not as something to try for a year and drop.
"This may not be a solution for your demographics," she said.
But if they're appropriate, Health Savings Accounts can be beneficial for employer and employee and put the responsibility for health decisions where it belongs -- in the individual's hands.
Learn more about Health Savings Accounts at HSA for America.
Posted by Wiley Long at May 1, 2009 11:19 AM