HSAs Gain Momentum
New statistics from the US Department of the Treasury support what I am seeing in my own group benefits business. Employers and Employees are switching in ever greater numbers to health savings accounts (HSAs). Employers in charge of selecting the health care package for the company are switching the entire company, and in plans that allow for employee choice, many employees are selecting an HSA program for themselves and families. When it comes to Individual Health Insurance, i.e., not group coverage, most are selecting an HSA compatible insurance program. See the attached US Department of the Treasury bulletin: http://www.treas.gov/offices/public-affairs/hsa/pdf/fact-sheet-dramatic-growth.pdf
My personal belief is that the carriers are finally getting the pricing right to attract new participants. By switching from a high benefit, high premium plan to a high deductible, low premium plan often the entire high deductible can be paid through the premium savings alone. The great thing about having sufficient premium savings to pay the deductible is that if the savings are not spent, then they are not lost. In a traditional plan the money is sent to the insurer and you must file a claim to retrieve it.
Also, many are now starting to recognize an HSA as the best supplemental retirement account one can possess because the funds that finally come out of it can be tax free. Funds taken from a 401k, Sep-IRA, Pension Plan, etc. will always require the paying of tax in the year of withdrawal. Monies from an HSA can be withdrawn and spent on any of the expenses on the attached form illustrating IRS S213d: http://pacificbenefits.com/MedExp.html
It certainly makes sense to me to keep dollars in hand rather than send them to an insurance company needlessly. What you do not spend from your HSA you will have for a rainy day.
Click on this website to view a short powerpoint presentation on exactly how HSAs save money for employers and employees: