Newspapers Examine Use Of Health Savings Accounts

Health Savings Accounts

Summaries of recent articles about health savings accounts appearbelow.

• Employers: An increasing number of businesses looking to help\ttheir workers with health insurance costs "are turning to the\tHSA model as a way to protect themselves from escalating premiums\tand to offer their employees a creative way to shelter their wages,"\tRichard Bernstein, CEO of the insurance advising firm Richard\tS. Bernstein & Associates, writes in a Miami\tHerald business column. Bernstein writes that HSAs are\t"growing in popularity among employers" because the\taccounts are not affected by the "'use it or lose it'\tprovisions" if the "accumulated funds are not ... used for\tmedical expenses"; they "provide an attractive way to save\tmoney" that "grows tax-free"; and the accumulated\tfunds can be "used tax-free to pay Medicare deductibles and\tlong-term care insurance" (Bernstein, Miami Herald,\t1/7).

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• Investors: The Wall Street Journal on Saturday\texamined how "some of the [HSAs'] biggest beneficiaries are\tproving to be well-to-do investors looking for another way to fund\ttheir retirement savings." The Journal states,\t"Unlike the more widely used and better-known flexible spending\taccounts," HSAs provide beneficiaries "more control over\t-- and a bigger stake in -- their health spending," and\t"savings not needed to pay for out-of-pocket medical expenses\tcan accumulate ... for years." According to the Journal,\tmaking the maximum allowable annual payments to an HSA "can be\tan astute financial strategy for the well-heeled" and "can\tprovide a valuable source of retirement income alongside"\t401(k) and individual retirement accounts. However, HSAs are "less\tfavorable for lower-income unhealthy people because out-of-pocket\texpenses increase" with the amount of health services used, and\tthe "tax advantages aren't as great for people in lower\tbrackets" (Knight, Wall Street Journal, 1/5).

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