AS CONSUMERS continue to shoulder more of the burden for health care in the United States, one of the primary vehicles available to them is going unused -- the health savings account.
Vimo.com, an Internet health care comparison shopping site, says that in January 2006 there were 2.3 million more high-deductible health plans than HSAs, which means consumers are not taking advantage of the tax benefits associated with HSAs.
That number can change for the better, or the disparity can continue to grow. According to a Vimo study, one way to improve upon that number is for employers to make more HSA contributions, thereby encouraging employees to do the same.What often happens, according to Vimo, is that when a company transitions to an HDHP, the company pockets most of the large premium difference instead of using it to set up a healthy HSA for each employee. The average premium difference, according to America's Health Insurance Plans, is $7,529. Since benefits often are considered part of an employee's pay package, a 60 percent dip in the health insurance benefit is a blow to compensation, especially considering wages have remained relatively flat and benefits have been rising.
Vimo says employers have a real chance to make the CDHC model work if they view the transition from traditional coverage to CDHC as "converting a portion of this existing asset [health insurance premiums] from insurance to savings," thereby empowering employees to evolve into the health care consumers the next generation of workers must become.
"Unfortunately, the Vimo report shows that fewer than one out of every three consumers eligible to open an HSA has done so -- a shocking statistic because the accounts are such clear winners for consumers, and financial planning experts agree that those eligible to open HSAs should do so immediately," said Tom Cochrane, Vimo's CFA and vice president of partner relations.
The full report is available for download at www.vimo.com.
