Health Savings Accounts, or HSAs, came into the employee benefits landscape in 2004 and by the end of 2018, HSAs covered almost 30% of employees. It has grown in use as an option to address rising premiums for employers and employees.

According to the Kaiser Foundation, employee premiums have risen 51% over the past 10 years. Annual deductibles reflect 50% of the worker’s out of pocket spending, up from 26% in 2008. As the national conversation continues to swirl around health care options, it is a good time to gain an operational understanding of HSAs and to know the pros and cons.

In this two-part series, we will do an overview of how HSAs work, along with the pros and cons from an employee’s perspective. Let’s get stared.

Overview of an HSA

An HSA is like a personal savings account, but it can only be used for health care expenses.

To be eligible, you must be enrolled in a high deductible health plan. High yearly deductibles are over $1300 for an individual and $2,600 for a family. (They often are higher than this with each employer determining the individual HSA plan they will purchase through an insurance carrier.)

The employer can deposit funds toward the high deductible HSA. The average amount an employer deposited into their employee’s HSA for 2018 was $900; however, each employer may decide to contribute any amount of the higher deductible or no amount. The high deductible plan is usually selected as a way to reduce the premium increase from the insurance plan — both to the employer for their share and the employee for their share of the monthly premium.

The employee can deposit funds into their HSA up to $3,500 for individuals and $7,000 for families. (The amount changes yearly.) A bank is used to set up the HSA and it is used like a credit card, with an HSA card issued once funds are deposited. Contributions generally aren’t subject to federal income tax and the earnings in the account grow tax-free. Any funds deposited and not used this year can be rolled over at year end. The HSA can be used for dental, optical or medical care to cover out-of-pocket expenses.

Next article: what are the risks with an HSA?

New community outreach boot camp

The Patient Financial Navigator Foundation is thrilled to announce a second boot camp program beginning in 2020! It is all about our veterans!

The first 2020 Veterans Health Insurance Benefit Options – Turning 65 Boot Camp will be 6 to 8:30 p.m. Tuesday, March 10 in the College of Southern Idaho Fine Arts Center. There will be seven speakers. All ages are welcome at the free event.

We will be adding this dynamic health care boot camp to our existing camp:

The first 2020 Medicare 101, Social Security Benefits and Assistance for Seniors Boot Camp will be 8 a.m. to 12:30 p.m. Saturday, Feb. 29 at the CSI Fine Arts Center.

Ten local health care experts will share their expertise with the community for free. All ages welcome.

All class material will be posted on PFNFinc.com prior to each boot camp.

Hope to see you there!

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Day Egusquiza is the president and founder of the Patient Financial Navigator Foundation Inc. All historic articles and training material are available on the foundation’s webpage: PFNFinc.com. The foundation is an Idaho-based, family foundation formed in 2017. Call 208-423-9036 for more information. Do you have a topic for Health Care Buzz? Send it to daylee1@mindspring.com.


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