Many wait for others to try HSAs

By Jodie Snyder
Arizona Republic

For many employers, health saving accounts — the newest insurance innovation — is a lot like a swimming pool on summer's first hot day: inviting, intriguing, but they want someone else to test the waters.

Many Americans still aren't familiar with how the accounts work, and some employers have concerns about their long-term effects on healthcare costs.

It may help to think of an HSA as a 401(k) plan for health insurance.

They allow employees to save tax-free money for healthcare expenses; money not used in one year can be rolled over into the next. For example, if an employee put aside $750 one year, but he spent only $500, the extra $250 would carry over for future health bills.

The accounts are combined with a high-deductible insurance plan, which means employees pay a larger share of their healthcare bills out of their own pockets.

And some employers are concerned that the plans are attractive to healthy workers, while those with health problems likely would remain in traditional plans, driving up the per-person cost of those programs.

This year, employees can put $2,600 into an individual account and $5,150 into a family account. The accounts use pre-tax dollars, like 401(k) retirement savings. The money can be kept in investment funds such as money-market accounts and can be transferred if the employee switches jobs.

There has been some confusion about the difference between HSAs and medical flexible spending accounts, which some companies already offer.

There is one big difference between the two: Any money left in a flexible spending account at year's end is lost if not used, whereas the health savings money would roll over.