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January 02, 2012
Health Savings Accounts Control Health Care Costs
Two recently-released national surveys show that employers and employees are finding affordable health care with Health Savings Account plans. That's a combination of a high-deductible health insurance plan with a unique kind of savings that offers tax deductions and tax-free earnings, like IRAs.
According to the surveys, 77 percent of employers said that high-deductible health plans that worked with a Health Savings Account (HSA) could help control rising medical care costs. That's because a HSA can grow faster than traditional savings account in which earnings are taxed. Then, the savings can be used to pay for qualified medical expenses not covered by the HSA insurance.
HSA plans do make preventive health care exempt from having to meet a deductible in almost all states. Like most health plans with high deductibles, HSA plans tend to have low premiums. When that's combined with the tax deductions and tax-free earnings, HSA plans can be very rewarding.
HSA owners said they are saving more money with their HSA than they had before they opened one. They also said they are making healthier lifestyle choices now and using preventive health care. In addition, they are shopping more for lower-priced prescription drugs.
Employers also reported that the cost of providing HSA plans was less than the cost of standard group coverage. In addition, employees get to keep any HSA funds not spent on health care to build a retirement fund, which tends to make them more frugal. That also tends to keep the employer's health care costs down.
Both individuals and business owners may start a HSA. You can learn more about how a HSA works and the benefits it can provide here on our website.
Posted by Wiley Long at January 2, 2012 10:56 AM