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The Rise of Health Savings Accounts

During the last two years, the number of employers offering health savings accounts (HSA's) paired with high-deductible health plans has increased significantly.  This is an affirmation that employers are actively seeking ways to find relief from the ever-rising cost of employee health insurance coverage.  Two years ago, this product was not a mainstream health insurance option, but now employers and employees understand the workings and benefits of an HSA paired with a high-deductible health plan. 

Depending on the benefit design, plans with HSA's can yield savings of 20 to 25 percent compared to non-HSA plans.  This savings can help employers and employees fund their HSA's for future health care needs.  Other perks of a HSA are: pre-taxed dollars invested into the account, interest grows tax free,  and HSA dollars are not taxed when used to pay covered medical expenses.

For healthy people especially, HSA's can be a major benefit.  The less you use the more you save and earn.  Many like to think of an HSA as a medical 401(k).  Also, since most HSA plans have the preventative care mandate in place, the plans provide first-dollar coverage for services such as annual check-ups, which limit out-of-pocket costs.   Another benefit of an HSA plan is that even if an employee leaves their job, they can take their HSA funds with them to use on future covered medical expenses. For thinking long-term, HSA funds can be used to pay for medicare premiums, deductibles, copays, and even long-term care insurance.