The final regulations provide a means for employers to comply with the comparability requirements with respect to employees who have not established an Health Savings Account (HSA) by December 31, as well as with respect to employees who may have established an HSA but not notified the employer of that fact. To comply with the comparability rules for a calendar year with respect to such employees, the employer must comply with a notice requirement and a contribution requirement.

The final regulations also address the acceleration of employer contributions to employees’ Health Savings Accounts. For any calendar year, an employer may accelerate part or all of its contributions for the entire year to the Health Savings Accounts of employees who have incurred, during the calendar year, qualified medical expenses exceeding the employer’s cumulative HSA contributions at that time.

The regulations affect employers that contribute to employees’ Health Savings Accounts. The regulations are effective on April 17, 2008, and apply to employer contributions made for calendar years beginning on or after January 1, 2009. However, employers may rely on this guidance beginning on or after April 17, 2008.

You can read the report at: http://www.ustreas.gov/press/releases/reports/hsa_comparable_contributions_4830.pdf

And you can find more government information on Health Savings Accounts at: http://www.health--savings--accounts.com/gov-info.htm

The average deductible for the best-selling HSA plans in the small-group market was $2,244 for single coverage and $4,356 for family coverage, according to AHIP.

Average annual out-of-pocket limits were $3,462 for single coverage and $6,690 for family coverage.

Annual premiums averaged $3,189 for single coverage and $8,125 for family coverage.

"The increasing popularity of Health Savings Accounts is a result of managed care's failure," said John Goodman, president of the National Center for Policy Analysis, a Dallas-based public policy research organization. "The best way to control health care costs is to put patients in control of more of their health care dollars."

Critics of Health Savings Accounts, however, pointed to another study. The Government Accountability Office found that taxpayers with Health Savings Accounts in 2005 were, on average, more than twice as wealthy as other taxpayers. Contributions to Health Savings Accounts were more than twice as high as withdrawals. "Health Savings Accounts clearly are attractive to higher-income people who are looking for tax shelters," said Rep. Henry Waxman (D-Calif.). "But they aren't the answer for providing adequate health insurance coverage for the average American. This report provides further evidence that we need to re-examine whether this is the right way to use the government's resources to address our health care needs."

The House recently passed legislation that would require HSA administrators to substantiate that withdrawals from the accounts were used for allowable medical expenses. Republicans who opposed this provision said it was designed to undermine Health Savings Accounts by adding unnecessary administrative burdens. "Democrats should stop trying to dismantle this coverage option," said Rep. Charles Boustany (R-La.). "These accounts help cover the uninsured and lower health costs with preventive care, lower-cost medicines and fewer visits to emergency rooms."

The HSA studies are available at www.ahipresearch.org and www.gao.gov

Health Savings Accounts let you to pay for health-care expenses, like co-pays and deductibles, and save for future retiree expenses, such as Medicare premiums, on a tax-free basis. To qualify for an HSA in 2008, you need to be enrolled in an HSA-qualified health insurance plan with a deductible of at least $1,100 for individual coverage or $2,200 for a family.

If you're enrolled in a health insurance plan that qualifies you to open a tax-advantaged Health Savings Account, it's worth shopping around. Interest rates and investment options vary widely on Health Savings Accounts. And fee structures are all over the map, meaning that the amount you pay can vary widely.

If you're thinking of opening an HSA, it's important to know all the costs upfront as the fees can quickly mount up. Charges to watch out for include set-up fees, annual fees, monthly account maintenance fees, transaction fees and account closing fees.

Annual fees can range from zero to $185 per year, according to Forrester Research. The same goes for interest rates on accounts, which are typically tiered, rising as balances reach certain amounts.

Today, HSA custodians are offering investments, such as certificates of deposits, mutual funds or full brokerage services, in addition to the more plain-vanilla savings accounts.

Follow this link to find a list of recommended HSA Administrators.

To find more information on Health Savings Accounts, visit us at: http://www.health--savings--accounts.com

House Bill 977 exempts insurers from state premium taxes for the sale of high deductible health plans with a Health Savings Account, while allowing consumers to deduct from state income taxes an amount equal to premiums paid for their Health Savings Account insurance plan.

Senate Bill 383 compliments House Bill 977 by adding two provisions. First, Health Reimbursement Accounts (HRA) are accounts that employers may set up for employees that allow the employee to use pre-tax dollars to pay for health expenses, including health insurance. The bill states that HRA-only plans that are not sold with or packaged with individual health insurance policies are not insurance. Second, HSA plans must comply with the consumer choice option under current law. This means the insured will be able to choose any willing provider, as long as the insured pays any increase in premiums and cost.

"This legislation encourages more consumer choice by making quality, affordable health-care coverage more available," Perdue said. "More insured citizens means lower costs for all taxpayers, and preventative care means a healthier population. It will also allow small business owners to provide low cost health insurance to employees and their families."

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

You can only make Health Savings Account contributions for the months that you were covered under an HSA-qualified high-deductible health insurance plan. But...

For example, if you had HSA-qualified health insurance plan from January 1 to April 31, 2008, then you were eligible to make four months' worth of contributions. The maximum contribution limit for 2008 is $2,900 for people who are not yet age 55 with individual coverage. So you could contribute $966.67 (4/12 of $2,900). If you only had $200 taken out of your paycheck every month for the Health Savings Account ($800 total), then you can still contribute $166.67 to your Health Savings Account for 2008.

Because your contributions are no longer subtracted from your pay before taxes, you'll need to deduct those extra contributions when you file your 2008 income tax return (the last day for making 2008 contributions will be April 15, 2009).

Good news on the second half of your question: You can always use money from an existing Health Savings Account tax-free to pay out-of-pocket medical expenses in any year, even if you can't make new contributions, as long as the expenses were incurred after you opened the Health Savings Account.

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

By increasing maximum Health Savings Account contributions for 2009, the IRS and Department of Treasury have made it more attractive for individuals and employers to consider Health Savings Accounts when looking at health insurance options. Money contributed to a Health Savings Account is tax-deductible, and can be used to pay qualified medical expenses tax-free.

The contribution limit has been raised to $3000 for individuals and $5950 for families.

America's Health Insurance Plans (AHIP) data shows that enrollment in high-deductible health plans eligible to be tied with Health Savings Hccounts grew to 6.1 million in 2007, growing fastest in the small group market.

The higher contribution limits make Health Savings Accounts an even better value than before, which will no doubt just accelerrate the movement towards these types of plans. Not only are HSA-qualified health insurance plans less expensive, but the tax-deduction really makes them a no-brainer, particularly for people who are paying for some or all of their own health insurance costs.

Health Savings Accounts are similar to Individual Retirement Accounts (IRAs). The account is owned by the individual HSA holder, it is portable and is not dependent on continued employment with a particular employer, and money in the account grows tax-deferred. The big advantage over an IRA is that only with an HSA can money can be withdrawn from the account tax-free to pay for qualified medical expenses.

Most of our customers keep enough of their HSA money to cover their deductible in an easily accessible savings account. As their savings grow, they'll usually invest additional HSA funds in mutual funds or other investments with larger growth potential.

Individuals have until December 1 to obtain a qualifying high-deductible health plan in 2008 if they wish to take the deduction on 2008 taxes. Contributions can be made as late as April 15th.

The recent HSA contribution increases announced by the Internal Revenue Service means that policy holders can get an even larger tax deduction when maximizing their HSA contribution. This change will make these plans even more attractive as millions of people continue to transition from conventional co-pay health insurance plans, to high deductible HSA-qualified plans.

The Jacksonville-based grocer upgraded its software so that each of the thousands of checkout registers in the chain can identify qualifying products, charge them to the Health Savings Account, and then automatically subtract that amount from the total owed for all other purchases.

"This is all about making the shopping experience better for our customers," said Robin Miller, Winn-Dixie's director of communications. "We are very pleased to be able to offer this added convenience, especially in these challenging economic times."

HSA plans allow individuals to set aside a portion of their earnings to pay for qualified medical expenses. Money placed into an Health Savings Accounts are not subject to payroll taxes.

Winn-Dixie (NASDAQ: WINN) operates 520 grocery stores in Florida, Alabama, Louisiana, Georgia and Mississippi.

Here are some pointers to help you consider whether a Health Savings Account will benefit you and your family:

Nevertheless, some people will not realize any net savings. Those most likely to realize significant savings are people who pay all of their own health insurance premiums, such as the self-employed, who are relatively healthy with few medical expenses.

A health savings plan restores freedom of choice.

An HSA plan puts individual consumers back in control of their own health care. This also means that each individual must be more responsible for his or her own health care decisions. This approach of self-reliance is not always popular with or appropriate for everyone, especially those who have become comfortable with HMO-type "co-pay" plans.

Health Savings Accounts reduce income taxes.

Every dollar contributed into your HSA account is deducted from your taxable income in the same manner as contributions into a traditional IRA account, regardless of whether you spend it or just save it. Interest and investment earnings in a HSA accumulate tax-deferred, just like a traditional IRA.

Unlike an IRA, withdrawals are tax-FREE when used to pay qualifying medical expenses. In many situations, new account holders are able to almost fully fund their HSA with money saved on premiums from a prior, higher priced plan. By stashing all or most of those savings into an HSA, the account holder realizes instant, additional savings in the form of reduced taxes.

You must have a properly qualified high deductible health insurance policy in place first before you can open a Health Savings Account.

One of the biggest misconceptions about HSA plans is that any insurance policy with a high deductible will qualify the policyholder to establish an HSA account. IRS regulations, however, are quite specific. Not just any policy with a so-called "high deductible" will suffice. It is important to be certain that you are insured under a properly qualified policy. Your best bet is to work with a qualified and duly licensed health insurance broker who is experienced in marketing properly qualified HSA plans.

You must be insurable in order to qualify for the HSA-qualified health insurance policy.

Because most people do not have a properly qualified high deductible insurance policy, they will need to switch insurance plans in order to become HSA-eligible. Unless coverage is being offered under small group reform laws (generally groups with 2-49 employees), the new high deductible plan will be individually underwritten by an insurance company.

This means that some "pre-existing" conditions may not be fully covered. Alternatively, some companies may opt to cover certain "pre-existing" conditions in exchange for slightly higher premiums. Unfortunately, some health conditions simply render an individual uninsurable (examples: diabetes, chron's disease, heart attack, etc.). Underwriting requirements vary by state, which is another reason to rely on an experienced health plan broker.

Although HSA insurance premiums are low, they are not always as low as you might expect.

This happens for one main reason. Simply stated, the underlying insurance policy is just that—a health insurance policy. Although it has a "high" deductible, as required by law, the insurance company still must compensate for the risk it is assuming over the deductible amount, which it does by charging premiums.

Many companies offer policies with “one deductible” that all family members contribute toward. With those plans, it is not uncommon for premiums for a 5000 family deductible with 100% coverage after the deductible to be comparable to a 2500 "per person" deductible plan with 80/20 coverage after the deductible.

Lower premiums represent just one element of the lower net cost achieved with an HSA plan. The low net cost of an HSA plan is achieved after factoring in the benefits of lower taxes, made possible by the tax-deductible contribution to the HSA account. Thus, if obtaining the lowest possible gross premium is your main concern, you may wish to consider a high deductible, non-HSA policy, especially if you do not see the benefit to contributing to a tax-deductible savings account.

In the end, the HSA plan usually ends up being the low cost health insurance alternative after factoring in the net advantage gained from instant tax savings and long term tax-favorable growth.

An HSA offers your best chance to keep a lid on health insurance rate increases.

Make no mistake-you will have rate increases with your HSA insurance policy. Because an HSA qualified policy is still a health insurance policy at heart, there is no logical reason to presuppose that an HSA policy would be immune to rate increases required by an insurer to keep paying claims and stay in business.

But what you can expect is that the actual dollar amount of any future rate increases will be substantially lower compared to traditional health insurance plans (regular PPO and HMO plans). This is true because insurers base increases on percentages, and the same percentage of a lower base premium results in a lower dollar increase. It's not a perfect solution-but it is the most cost-efficient solution for many qualified people.

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

Getting into the insurance business could be a way for banks to increase their deposits and capture billions of dollars previously paid to health plans in the form of premiums, says James Knight, M.D., chairman of 1st Pacific Bank of California and CEO of Consumer Directed Health Care, Inc., a consumer-directed health (CDH) consulting firm.

In 2007, according to Knight, health plans collectively took in about $700 billion in premium revenue for their commercial insurance products. In theory, switching consumers to high-deductible plans should reduce that premium revenue by about $300 billion, he says. Some of that savings could be redirected to consumer-owned Health Savings Accounts. However, premiums charged for some HSA-qualified plans are far too high given the large deductibles enrollees are asked to meet before coverage begins, he contends.

"The insurance product ought to be very inexpensive compared to low-deductible (copayment-based) policies," Knight asserts. "But the incumbent insurers aren't interested in reducing their premium revenue."

However, United Healthcare, the nation's largest seller of HSA-qualified plans, says its plans (sold through its Golden Rule subsidiary) typically cost 45% to 55% less than its more traditional coverage options, according to spokesperson Ian Stanton. As of Jan. 1, more than 1.3 million lives were covered by one of United's HSA-based plans.

Banks May Offer Plans for Less

According to Knight, premiums for an insurance policy that carries a $6,000 annual deductible should be half the price of a policy that has a $500 deductible because the enrollee assumes far more financial risk. He cites the Rand Health Insurance Experiment, which determined that moving to high-deductible coverage should reduce insured payouts by at least 43%. Knight adds that average per-capita spending for people under age 65 is probably between $2,700 and $3,000 per year. But premiums often don't reflect the savings that health plans reap. And that means there is less money for consumers to invest in Health Savings Accounts.

"Banks are waiting for the bouquet, but when it arrives, it's just a couple of flowers," he quips.

Low-cost coverage would free up more money for customers to place into their Health Savings Accounts, Knight suggests. An increase in core deposits, he says, "is platinum to banks right now." Renewable deposits, Knight adds, could make the cost of running a health insurance business akin to a marketing expense.

Some banks already own property and casualty insurance companies. And banks that sell insurance tend to be more profitable than those that don't, according to data released this month by Mamaroneck, N.Y.-based Bank Insurance Market Research Group. According to the report, banks that had some insurance activity in 2007 reported 44% higher (median) net income than banks that didn't have such side businesses.

Large banks, which tend to be more profitable anyway, are more likely to operate an insurance businesses than are smaller firms, and the higher net income was apparent in all asset-size groups, according to the study. The smallest banks (less than $250 million in assets) that had some insurance activity had 40% higher median net income than that of similar-sized firms that didn't offer insurance.

1999 Law Allows Competition

Under the Gramm-Leach-Bliley Act of 1999 (GLBA), financial service companies, large banks, or syndicates of midsized banks would be allowed to sell HSA-qualified insurance plans. The law repealed Glass-Steagall, a series of laws enacted beginning in 1933 that prohibited banks from offering investment and insurance services. GLBA allowed financial-service firms to offer investment, commercial banking and insurance services under one corporate roof.

So far, the insurance companies are the only ones taking advantage of the structure allowed under GLBA, primarily "as a defensive measure against the loss of premium revenue into HSA deposits," says Knight. "Hopefully, well-capitalized banks will soon see the wisdom and market advantage of this structure."

But launching an insurance company could be tricky. GLBA confirms that banks can sell certain insurance products, and underwrite certain other insurance products (e.g., credit life insurance). Broader underwriting authority is available if the bank contracts with an insurance affiliate of its holding company. Such an affiliate would not be limited in the range of insurance products it could underwrite, according to Joseph Yesutis, a banking and financial services attorney with Alston & Bird in Washington, D.C. Once the holding company has made the determination to add an insurance-underwriting subsidiary, the question becomes build or buy, he explains.

Regulations May Be Obstacle to Banks

The biggest obstacle to creating an insurance affiliate would be the various state Department of Insurance (DOI) requirements such as rate approvals and reserve and registration requirements, concurs John Hickman, partner and head of the Health Benefits Practice at Alston & Bird. "This DOI infrastructure can take years to develop," he says. "Thus, there likely would be a significant advantage for the holding company to acquire an insurer as opposed to starting from scratch."

And some banks would rather partner with health plans than compete with them. "We see more of an opportunity to partner" with health plans, says Jill Kelly, senior vice president at The Bancorp Bank. "That allows each industry to do what they are good at." Kelly adds that potential synergies might exist between insurers and banks to improve claims-processing efficiencies.

Could Banks Offer Lower Premiums?

A group of midsized banks, according to Knight, could contribute about $15 million to purchase a dormant insurance company that can sell HSA-qualified health plans. "Of course they would have to abide by the same rules that govern other health insurers, but with the right structure, there's nothing that would prohibit a bank from doing this," he says.

The premiums for HSA-based health coverage seem to vary by region. In some states, such as California and Texas, HDHPs are a bargain compared to more traditional insurance products. "But there are other states where agents say they aren't very competitive," says Tim Morales, president of HSA Trustee Services in Lake Geneva, Wis.

Knight says the idea of bank-owned insurance companies could be permanently shelved if the Democrats win the White House and retain both houses of Congress in 2009. The HSA substantiation bill, which died in Congress last month, is likely to surface again in the next Congress if there is a better chance of passing it, according to industry observers. And a law that requires substantiation of HSA expenses would "kill the market penetration" of Health Savings Accounts, according to Knight. Banks, he adds, tend to be conservative and probably won't invest in such a strategy if the next presidential administration doesn't support the growth of Health Savings Accounts.

“More employers and consumers are discovering that consumer-driven health plans, and Health Savings Accounts in particular, are among the most effective ways to give people greater control over their health care spending and can help drive more affordable coverage,” said Meredith Baratz, vice president of Market Solutions for UnitedHealthcare’s Definity CDH portfolio. “Health Savings Accounts, especially when coupled with robust health information and education programs, give people the tools they need to become more informed health care consumers. Our studies show that they get the preventive care they need to stay healthy and take a more active role in managing their health-related finances in these programs.”

More than 22,500 employers now offer an HSA plan through United Healthcare. In fact, membership through large national companies offering a health plan connected to an HSA or HRA increased by more than 325,000 participants from December 2007 to March 2008, signaling the largest new year increase in HSA enrollment for large customers since the plans became available.

As participation in HSA-based health plans has rapidly increased, so has the related health banking activity. UnitedHealth Group’s OptumHealth Bank (formerly Exante Bank) reported that, as of March 31, 2008, HSA deposits total $580 million. About $25 million of those deposits have been invested in a variety of mutual fund options offered by OptumHealth Bank, reinforcing the long-term tax-advantaged savings potential of Health Savings Accounts.

The rise in popularity of Health Savings Accounts extends beyond employers. In the individual market, United Healthcare’s Golden Rule Insurance Company, which helped pioneer the HSA concept more than 15 years ago, says that 38 percent of its customers nationally are now covered by HSA plans. More importantly, 40 percent of customers purchasing individual HSA-qualified plans in 2007 indicated that they had no previous health insurance coverage.

“We believe the more consumers learn about Health Savings Accounts and how they work, the more they will understand the affordability, tax savings and control over health care spending that HSA plans offer,” said Richard A. Collins, president of UnitedHealthcare’s individual business.

Here's an excerpt from his testimony:

...Most of what you have been told in the testimony to date is either mistaken, based on suppositions or surveys of uninformed people, or simply irrelevant to Health Savings Accounts. For example –

* You were told that the tax break associated with Health Savings Accounts is unprecedented and a boon to the "wealthy." In fact, the tax treatment of Health Savings Accounts is precisely the same tax treatment afforded to employer-sponsored health insurance. Premiums are untaxed and benefits are untaxed. It is true that the "wealthy" get a larger tax benefits than the unwealthy, but that is the case for employer-sponsored comprehensive coverage as well as for Health Savings Accounts. Further, the opportunity to save, say, $2,000 a year that would otherwise go to an insurance company is of far greater benefit to the low-income worker who earns $20,000 a year than to the wealthy executive who makes $200,000, regardless of the tax treatment.

* You were told that "the sick" do not benefit from Health Savings Accounts because of the higher out-of-pocket responsibility. In fact, both the healthy and the sick have less out-of-pocket exposure with an HSA, a point that was well documented in a recent Health Affairs article. In fact, Health Savings Accounts limit a patient's out-of-pocket exposure, something that is not true for the Medicare program, for instance.

* You were told that most health care spending takes place above the deductible associated with an HSA, so they will not have "a significant effect on overall spending." This is probably true, but irrelevant. Health Savings Accounts are having a profound effect on lower-cost routine spending and that is significant by itself. Other strategies are needed for high-cost services with or without an HSA.

* You were told that many people with a high-deductible health plan do not open up an HSA. That, too, is true but irrelevant. The HSA itself is attractive for those people who are able to get a tax benefit from passing their direct payments through the account. Other people, especially those who pay no income taxes, may find it more suitable to simply pay cash at the time of services or to keep their funds in some other, non-HSA, account. Further, there is likely to be a lag time between the point of enrollment and opening up that account. This is not a problem.

* You were told that some people who have to pay directly for care or for prescription drugs may fail to do so to save the money. That also may sometimes be true. But there is never any guarantee that people will always fill their prescriptions and take their medications regardless of the financing scheme. In fact, we know that many health conditions are caused or aggravated by patient behavior under all health insurance systems. But, to the extent that people with an HSA are more knowledgeable and more invested in their own care, their compliance will be better than it is for other benefit programs. And that is precisely what we are seeing in the market.

Given that Health Savings Accounts are becoming increasingly popular (with over 6 million Americans currently enrolled, an increase of 35% from last year), it's important that lawmakers understand the tremendous benefits they offer for Americans seeking the best value for their health care dollar.

Let's just hope that the committee was listening closely!

They voiced their grievances with England. But rather than negotiating, King George sent extra soldiers to the colonies to help control any rebellion that might take place. The following timeline explains the important events that lead to the signing of the Declaration of Independence and America’s split from England’s rule.

September 1774: The 13 colonies sent delegates to Philadelphia, Pennsylvania, to form the First Continental Congress. At this time, although they were frustrated with England, the colonies were not ready to break away from the mother land.

April 1775: British troops advanced on Concord, Massachusetts, motivating Paul Revere to ride across the land to warn about the approaching English soldiers, announcing: “The British are coming, the British are coming.” The battle of Concord became known as the “shot heard round the world” and marked the unofficial beginning of the American Revolution.

May 1776: After trying to work out their differences with England for almost a year without any success, the colonies again sent delegates to the Second Continental Congress.

June 1776: Realizing their efforts were hopeless, Congress decided to become free from British rule. So they formed a committee to create a document declaring independence from the crown – the Declaration of Independence. Thomas Jefferson headed this committee, which also included John Adams, Benjamin Franklin, Philip Livingston, and Roger Sherman.

June 28, 1776: Jefferson presented the first draft of the Declaration of Independence to Congress.

July 4, 1776: After various changes to Jefferson’s original draft, Congress voted in the afternoon on that day. And, of the 13 colonies, 9 voted in favor of the Declaration; 2 (Pennsylvania and South Carolina) voted No; Delaware was undecided; and New York abstained. John Hancock, President of the Continental Congress, was the first to sign the Declaration of Independence.

July 6, 1776: The Pennsylvania Evening Post printed the Declaration of Independence.

July 8, 1776: In Philadelphia’s Independence Square, the first public reading of the declaration took place. The colonists rejoiced when they heard it. The bell in Independence Hall (then known as the “Province Bell”) would later be renamed the “Liberty Bell” after its inscription: “Proclaim Liberty Throughout All the Land Unto All the Inhabitants Thereof.”

August 1776: While the signing of the Declaration of Independence started on July 4th, it was completed in August. Even so, the Fourth of July was accepted as the official anniversary of United States independence from England. A new nation was born.

July 4, 1777: The first Independence Day celebration took place in Philadelphia. People rang bells and lighted candles and firecrackers. Now, although the colonists started celebrating their independence from Britain in 1777, the War of Independence lasted until 1783. And while Congress made Independence Day an official holiday that year, it wasn’t until 1941 that the Fourth of July was declared a federal holiday.

As Thomas Jefferson alledgedly said, "The price of liberty is eternal vigilence". Today there are still forces trying to reduce our freedoms. One that hits home on this blog is the push for socialized medicine. As is evidenced in several countries (Canada, Britain), this type of system limits choices, increases waiting lists, and prevents people from controlling their own healthcare. That’s why so many Canadians come to the U.S. for treatment each year.

At HSA for America, we’re commited to saving you money, and protecting your individual health freedom. Happy Independence Day.

As evidenced in the report, Q1 2008 realized significant quarter-over-quarter growth in average funds held in both HSA deposit and investment accounts - as high as 25% for deposit accounts - indicating that Health Savings Accounts are being used as savings account vehicles with larger average balances than the average retail checking account.

Average investment account inflows were more than double average outflows for the quarter. HSA account holders age 50+ had more than double the amount invested at the end of Q1 on average compared with account holders age 25-40.

Additionally, the HSA Market Report for Q1 2008 shows an increased spend of 10% on average in family plan accounts, with a slightly increased spend on average in individual plan accounts. The report breaks out actual spend characteristics by category, including bill payments, reimbursements, debit card transactions, checks, and ATM withdrawals. It also provides key data on Customer Service Representative (CSR) touches for the quarter.

Their report can be downloaded at http://www.canopyfi.com/hsa_stat_report.pdf

Current law requires Health Savings Account holders to document their withdrawals in the event of an IRS audit. The new legislation would require every Health Savings Account holder to document every HSA-qualified withdrawal, every time they file their taxes.

Led by Health Subcommittee Chairman Pete Stark, D-Calif., supporters claim the legislation seeks only to prevent people from claiming a tax break for nonqualified expenses. Stark cites reports that "HSA funds appear to have been spent on escort services, at casinos and bowling facilities."

Yet Congress' own Government Accountability Office found that 90 percent of HSA withdrawals are applied directly to qualified medical expenses. Even if the remaining 10 percent were spent at brothels and bowling alleys, federal law does not require funds contributed to an HSA to be used only for medical care. It requires only that withdrawals not exceed qualified medical expenses, or that the account holder pay taxes and a penalty on any excess withdrawals.

In either case, random audits police compliance. More importantly, HSA critics haven't produced any actual evidence of unlawful withdrawals.

The real reason for the anti-HSA legislation lies elsewhere.

The federal government has traditionally offered workers a large tax break for job-based health benefits. In practice, however, that tax break effectively robs you of control over a large chunk of your earnings: the money your employer puts toward your health insurance. For the average insured family, that's about $9,000 per year. The law also robs you of control over your coverage decisions.

In 2004, Congress extended that tax break to employee-owned Health Savings Accounts, enabling workers to reclaim ownership of a portion of those earnings.

If a family obtains a high-deductible health plan, he or his employer can contribute as much as $5,800 to an HSA, tax-free. The family owns the account, which stays with them from job to job. So long as they spend that money on medical care, HSA funds are never taxed. Otherwise, HSA rules are identical to those for traditional IRAs.

Some politicians just don't want workers to control their own earnings and have launched an all-out assault on Health Savings Accounts.

Last week, Stark complained, "The total value of all Health Savings Accounts contributions reported to IRS in 2005 was about twice that of withdrawals, suggesting an interest in it more as a shelter than vehicle to obtain needed health care or supplement inadequate coverage."

Stark is shocked — shocked! — that workers are using their Health Savings Accounts as... a savings vehicle.

Stark further alleges that Health Savings Accounts "are an effective tax shelter for people whose average incomes are nearly triple that of average tax filers."

True, Health Savings Accounts provide a tax break that gets more valuable as earnings rise. (That's because income tax rates rise with income.) Yet the tax break for employer-controlled coverage provides identical tax breaks to millions more high-income earners. Where is the outrage over that tax loophole?

HSA opponents offer no evidence that unlawful HSA withdrawals are a serious problem, and they can't say why random audits aren't enough to deter them. They are highly suspicious when Americans take money out of their Health Savings Accounts — but equally suspicious when they leave it in. And tax breaks for the wealthy appear to be kosher, unless they let workers control their earnings.

All of which leaves Stark and his fellow travelers open to the charge that what really bothers them is the fact that Health Savings Accounts let individuals control their own money.

The legislation also allows you to use of existing funds in your IRA as a source of tax-free contribution to your existing Health Savings Account.

The owner of an HSA is also eligible for a second transfer within the same taxable year if he has a self-only high deductible health plan (HDHP) during the period of the IRA transfer, and within that same period purchases family HDHP coverage. The fund distribution remains tax-free. This strategy has been very popular with our customers. This is a great provision for someone who wants to get their account fully funded, so they know they've got the money to cover a deductible. That way, they can carry a higher deductible, lower-priced health insurance plan.

There are several conditions for eligibility for the tax advantages under the 2006 amendment. The individual making the transfer must remain eligible within 12 months of the IRA to HSA funding distribution, referred to as the "testing period." If within that period, the individual becomes ineligible, then the transferred amount will be subject to the usual income taxes. Furthermore, the amount transferred will be deducted from the maximum allowed HSA contribution for that year.

Having money from an IRA work for immediate medical needs frees up some funds that would otherwise go to tax payments. The value of an HSA is especially high when the account holder is still productive, to stave off the pressures of high taxation and rising medical care costs.

Transferring funds from an IRA to an HSA enables individuals to reduce their potential tax liabilities, and to also lower their health insurance premiums by switching to higher deductible plans.

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