Health Savings Accounts: Has the Revolution Begun?

Abstract

Health savings accounts are the biggest innovation to hit the group benefits market since the advent of HMOs. By migrating to high-deductible health insurance plans, employers can reduce their premiums while shifting the burden of health care cost back to employees. And with a little instruction from the human resources department, employees should welcome this program because they can use tax-deferred health savings account dollars to put toward their retirement without adding additional costs to the company benefits program. This is a winning scenario that sweetens the pot for employees, giving them another tax-savings mechanism to save for retirement and allowing employers to migrate to less costly high-deductible health insurance programs.