Give your HSA a checkup

Are you getting sick of the skyrocketing premiums on the health insurance plan associated with your health savings account?

Maybe it's time to give your HSA a checkup to determine if it's still doing all it can to keep your family in the black financially.

What, you didn't know you could shop for a new health insurance plan associated with your HSA?

"The short answer is yes, absolutely," says Wiley Long, president of HSA for America, a Fort Collins, Colo.-based HSA insurance brokerage.

"Rates do go up, and HSA plans can be dramatically different. We see plans from two different insurance companies with almost identical deductibles, and the monthly premium on one could be $250 and the other could be $450. It's shocking, a lot of times." (To compare insurance policies and quotes, visit, a Bankrate company.)

Checkup checklist
Are the premiums associated with your high-deductible health plan rising? If so, try these steps.
5 ways to lower HSA-associated costs:
  1. Shop around
  2. Increase your deductible
  3. Buy supplemental accident insurance
  4. Read the fine print
  5. Set up an automatic policy review

A confusing start

According to an April 2008 report by America's Health Insurance Plans, a health insurance industry group, there are now 6.1 million Americans covered by HSAs.

While individual coverage has almost tripled in less than three years -- from 556,000 in March 2005 to 1.5 million in January 2008 -- the largest jump has occurred among large-group coverage. That type of coverage grew from 162,000 participants to 2.8 million during the same period. Even Uncle Sam now offers HSAs to federal workers.

HSA and HDHP 101
Health savings accounts are tax-advantaged savings accounts that allow policyholders to spend pretax money on covered medical expenses.

To qualify for an HSA, a person must have what is known as a high-deductible health plan, or HDHP, which features a higher deductible but lower premium than traditional health insurance plans.

HSAs originated with a pilot program under the Health Insurance Portability and Accountability Act of 1996. They became permanent after passage of the Medicare bill in December 2003.

By law, HSAs are available to those who enroll in a HDHP, are not enrolled in Medicare or covered by another health care plan, and are not claimed as a dependent on another's federal income tax return.



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