Why the Delay in HSA Offerings?
While HSAs (health savings accounts) are the biggest market-based reform to hit health care policy in years, it may take a while for the idea to take off.

Writing in the November 3 Wall Street Journal, Ron Lieber offers several reasons why. One: "Most larger employers plan their insurance offerings for the following year by the middle of the previous year, but it took the Treasury department until this summer to sort through all the questions that employers had about how to administer" the new arrangements.

A second reason, he says, is the question of how the accounts will work for people with chronic conditions. "Many employers would like to give enhanced overage to people with these diseases, paying for care and drugs related to certain conditions before the employee has hit the deductible. If they can't, then people with these afflictions will drain their savings accounts year after year as they reach and pass the deductible."

In the worst case, it would seem that this will turn out as a wash for the employer. Through expensive low-deductible coverage that serves more as a pre-paid services plan rather than an insurance plan for unexpected, catastrophic events, employers (and in reality, employees) are already paying large sums. If the employee must take the money out of the HSA, then the HSA is simply making the spending explicit. But other employees, by contrast, can benefit from the growth of HSA funds that are unused, roll over from year to year, and growth through compounding returns.

Lieber says that some companies are considering HRAS (health reimbursement accounts) as an alternative. That's not as worker-friendly as the HSA path. An employee who leaves a company can keep the funds in his HSA, but funds in an HRA can revert to the employer in the case of an employee departure.

Labels: Health care

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