What is a Health Savings Account?

As employers in Texas face double digit rate increases again this year on their group health insurance plans, many businesses are looking for ways to contain the spiraling costs in providing these benefits.

Health Savings Accounts were created by the Medicare bill signed by President Bush on December 8, 2003 and are designed to help individuals save for future qualified medical and retiree health expenses on a tax free basis.  

Health Savings Accounts are now available for employers to purchase for their employees. 

These plans represent the future of health care and offer employers an affordable option in today's challenging healthcare environment.

How it Works.

The Employer purchases a High-Deductible, Health Savings Accounts Compatible Group Health Plan from one of several insurance carriers.  Some of the insurance companies offering these plans include:

• Aetna
• Assurant Health
• Blue Cross Blue Shield of Texas
• Humana
• United Health Care

The Employee funds, in a separate account at an Health Savings Accounts bank, an amount of up to 100% of their deductible, not to exceed the following limits for 2008: 

• $2,900 Individual
• $5,800 Family

For calendar year 2008, a "high deductible health plan" is one that has an annual deductible of at least $1,100 for self-only coverage  ($2,200 for family coverage) and annual out-of-pocket expenses up to $5,600 for self-only coverage ($11,200 for family coverage).

A Debit Card is then issued to the employee to use as payment for out-of-pocket medical expenses.  

All contributions into the savings fund are tax deductible and grow tax free.  

Monthly premiums are inherently low due to the high-deductible associated with the Health Savings Accounts program.  

---

A careful review of the Health Savings Accounts plans will assist Texas employers to select the company and plan that best suits their needs.