![]() HSA-qualified plans represented 27% of new purchases in the individual market, 31% of new enrollment in the small group market and 6% of new enrollment in the large group market. ![]() A follow-up survey by AHIP reported that the number of Americans covered by HSA-qualified plans had grown to 6.1 million as of January 2008 (4.6 million through employer-sponsored plans and 1.5 million covered by individually purchased HSA-qualified plans). HSA-qualified plans represented 17% of new policies sold in the small group market and 8% of new policies sold in the large group market. In the individual market, 25% of new purchasers bought HSA-qualified plans. This represented an increase of 1.3 million since January 2006. Of those, 3.4 million were covered through employer-sponsored plans, and 1.1 million were covered by individually purchased HSA-qualified plans. Ī survey of health insurers performed by America's Health Insurance Plans (AHIP) found that 4.5 million Americans were covered by HSA-qualified health plans as of January 2007. ![]() In small companies, 24% were in high-deductible health plans vs 17% in larger firms. 11% of covered workers were in HSAs, while 8% were in HRAs. Large firms (38%) were somewhat more likely than small (31%) firms to offer such options. Approximately 31% of firms offering health insurance offered an HSA (26%) or an HRA (5%) option. Large firms were more likely to offer a high-deductible plan (18%), but enrollment was higher in small firms (8% of covered workers, versus 4% in larger firms). The study found that roughly 10% of firms offered such plans to their workers. They were developed to replace the medical savings account system.Ī survey of employers published by the Kaiser Family Foundation in September 2008 found that 8% of covered workers were enrolled in a consumer-driven health plan (including both HSAs and Health Reimbursement Accounts), up from 4% in 2006. HSAs were established as part of the Medicare Prescription Drug, Improvement, and Modernization Act, which included the enactment of Internal Revenue Code section 223, effective for tax years beginning after December 31, 2003, signed into law by President George W. There is also debate about consumer satisfaction with these plans. Opponents observe that the structure of HSAs complicates the decision of whether to obtain medical treatment, by setting it against tax liability and retirement-saving goals. According to proponents, HSAs encourage saving for future health care expenses, allow the patient to receive needed care without a gatekeeper to determine what benefits are allowed, and make consumers more responsible for their own health care choices through the required high-deductible health plan. ![]() Proponents of HSAs believe that they are an important reform that will help reduce the growth of health care costs and increase the efficiency of the health care system. The accounts are a component of consumer-driven health care. Withdrawals for non-medical expenses are treated very similarly to those in an individual retirement account (IRA) in that they may provide tax advantages if taken after retirement age, and they incur penalties if taken earlier. Beginning in early 2011 over-the-counter medications could not be paid with an HSA without a doctor's prescription, although that requirement was lifted as of January 1, 2020. HSA funds may be used to pay for qualified medical expenses at any time without federal tax liability or penalty. ![]() HSAs are owned by the individual, which differentiates them from company-owned Health Reimbursement Arrangements (HRA) that are an alternate tax-deductible source of funds paired with either high-deductible health plans or standard health plans. Unlike a flexible spending account (FSA), HSA funds roll over and accumulate year to year if they are not spent. The funds contributed to an account are not subject to federal income tax at the time of deposit. A health savings account ( HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). ![]()
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