New Health Savings Accounts Can Reduce the Cost of Medical Care

Gardner, Randy; Welch, Julie; Garcia, Denise
June 2004
Journal of Financial Planning;Jun2004, Vol. 17 Issue 6, p34
Academic Journal
The article focuses on Health Savings Accounts (HSA) established under the U.S. Medicare Prescription Drug, Improvement and Modernization Act of 2003. HSA replace employer-provided Archer Medical Savings Accounts (MSA), which continue in use but cannot be created after 2003. Such accounts are a significant improvement over MSA for several reasons. First, HSA accounts are owned by the individual, not the employer. Second, 100 percent of the health-insurance deductible can be contributed and deducted by the individual or employer. To be eligible for an HSA, the individual must meet several conditions. First, they must be covered under a high-deductible health insurance plan (HDHP). Second, the individual may not be covered by any other health plan that is not an HDHP, including a spouse' plan, parent's plan or Medicare. Third, the individual claiming deductible contributions to the HSA may not be claimed as a dependent on another person's tax return. Qualified medical expenses that the individual can have the HSA pay include expenses that would be deductible for tax purposes as medical expenses and nonprescription drugs, as long as they are not reimbursed by the HDHP. The maximum annual deductible contribution an individual can make to an HSA is the lesser of the individual's annual deductible under the HDHP or $2,600 for self-only coverage or $5,150 for family coverage. If the individual is 55 to 64, the individual can contribute $500 extra to an HSA in 2004. This extra contribution increases $100 annually, until it reaches $1,000 in 2009. Contribution balances not used to pay deductibles or co-pays are carried forward. HSA accounts are saving and investment vehicles that allow individuals more control over their healthcare decisions. Such accounts are a financial planning tool that should be considered by each of our clients.


Related Articles

  • Health-savings accounts just getting started. McChesney, Charles // Business Journal (Central New York);1/28/2005, Vol. 19 Issue 4, p13 

    Reports on the increase in demand of health-savings account (HSA) in the U.S. Advantages of HSA over other health accounts; Benefits of HSA for employers; Assertion on the capacity of HSA to lower health insurance premiums.

  • Five reasons (not)to enroll in an HSA. Trussell, Marty // Benefits Selling;Oct2012, Vol. 10 Issue 10, p68 

    The article discusses several reasons why a health savings account (HSA) may not be for everyone. It notes that most employees and employers who contribute to their employee's account make the contribution every payday but it may take a while to build up enough dollars to cover the deductible....

  • HEALTHCARE CONSUMERISM: Latest Trend or The Real Thing? Bouknight, Joe // South Carolina Business;May/Jun2009, Vol. 30 Issue 3, p10 

    The article reports on consumer directed healthcare plan (CDHP) in the U.S. which includes preventive care, sets up health savings accounts (HSAs) and is priced at a discount to other traditional plan options. As reported, employees will come to appreciate the financial value of the CDHP and...

  • A Health Revolution in Slo-Mo. Weisser, Cybele // Money;Jul2005, Vol. 34 Issue 7, p28 

    Focuses on health savings accounts. How these accounts have not become popular in the United States; Reasons for this; Assertion that not all companies offer them.

  • Healthcare OUTLOOK 2006: From a Gallop Down to a Canter. Marshall, Jeffrey // Financial Executive;Dec2005, Vol. 21 Issue 10, p34 

    The article presents the results of the 2004 U.S. Health Plan Cost Trend Survey. According to the findings health care costs are expected to increase. Health plan sponsors are expected to pay $900 per participant in 2006 if they maintain current benefits levels. Many companies report a...

  • Miracle cure or poison pill? Wojcik, Joanne // Pensions & Investments;Nov2008 Benefits Out, Vol. 36, p12 

    The article offers information on the consumer-driven health plans (CDHPs) which is gaining popularity in the U.S. in view of the health-care cost crisis. It states that CDHP is a combination of high-deductible medical insurance coupled with a health savings account. It mentions that to...

  • Health Savings Accounts. Bannen, John T.; Occhetti, Kristin A. // Probate & Property;Nov/Dec2009, Vol. 23 Issue 6, p30 

    The article offers infomation on the health savings accounts (HSA) for estate lanners in the U.S. It notes that HSAs are available for employees with high-deductible health plans (HDHPs) to control health insurance costs of the employers. Meanwhile, it mentions that the HSAs have no...

  • Perseverance pays off in HSA reform battle.  // Business Insurance;12/18/2006, Vol. 40 Issue 51, p8 

    In this article the author reflects on the efforts of employers to win passage of legislation to make health savings accounts (HSA) work better. He asserts that the HSA changes would have had no chance to be included in the broader tax bill had not business lobbying groups kept up the pressure...

  • Consumers Want HSAs as an Option.  // Advisor Today;Oct2009, Vol. 104 Issue 10, p34 

    The article highlights a nationwide survey conducted by OptumHealth Inc. which determined the satisfaction of U.S. health savings account (HAS) owners with their accounts. It found that 91% believed that such accounts should remain an option for Americans. It also investigated that 80% have said...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics