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Expand your benefit options; more insurers offer HSA plans

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in Human Resources

Issue: More health insurance companies are offering plans that include Health Savings Accounts (HSAs).

Benefit: HSA popularity will take off in 2005-2006. And more insurers will translate into better plan options.

Action: Use this background info to talk with your insurer or broker about whether an HSA plan is a smart addition.

If you're considering offering a tax-advantaged Health Savings Account (HSA) plan, you now have more choices. Insurers have been jumping on the HSA bandwagon in recent months.

HSAs are 401(k)-like accounts that allow people to pull pretax money from their paychecks to pay for out-of-pocket medical expenses. Unlike flex-spending accounts, HSAs are portable between jobs, and participants can hoard the money for years and use it after retirement.

HSAs must be paired with a high-deductible health insurance policy. Specifically, the policy's deductible must be larger than $1,000 for single coverage and $2,000 for family coverage. Individuals can contribute to their HSA up to the amount of their policy deductible, but no more than $2,650 a year. Families face a $5,250 limit.

Dozens of insurance companies and financial institutions have rolled out HSA products, including Aetna, Assurant Health, Blue Cross Blue Shield, Cigna, Great-West, Humana, Mellon Financial, JPMorgan Chase and UnitedHealthcare.

Many HSAs are vanilla interest-bearing accounts that invest HSA funds in, say, CDs. But some insurers team up with financial services firms to offer HSAs that invest in stocks, bonds and mutual funds.

Tip: Educate your employees if you decide to launch an HSA plan. A new survey says 61 percent of U.S. workers have never heard of HSAs.

Where to find HSA providers


  • www.hsadecisions.org (click on 'Directories')



  • www.hsainsider.com



  • www.health--savings--accounts.com (two hyphens between words)




For more on HSAs, see www.opm.gov/hsa or www.treas.gov/offices/public-affairs/ hsa.

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