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A new study by America's Health Insurance Plans shows that the use of Health Savings Plans (HSAs) more than doubled over the last six months.
HSAs are one solution to runaway health care costs. These arrangements allow employers to pair high-deductible health care plans (which have the advantage of lower premium costs) with separate, tax-advantaged accounts in order to pay employee health care expenses. An employer, employee or both can contribute into such designated accounts, with tax-free contributions, earnings and withdrawals when used for employee medical expenses. As with 401(k) plans, funds accumulated in HSAs become the property of the individual, thus creating an incentive for an employee to exercise judgment in making personal medical care decisions.
AMT encourages members to explore Health Savings Accounts (HSAs) as a possible solution to runaway costs. Market build-out has been rapid since HSAs came online at the beginning of 2004. HSAs are now available in all 50 states, with surveys indicating that employers converting to such plans realize double-digit percentage savings as compared with traditional coverage. Importantly, HSAs also serve to stabilize annual rate increases. AMT itself now offers HSA health coverage to its employees.
No further legislation is required in order for HSAs to proliferate. AMT will continue to monitor and report to members on market trends and HSA implementation guidelines.
Additionally, AMT will work to advance President Bush's plan to make HSAs even more advantageous to employers by providing new tax credits to those who create HSAs for their employees.
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