Doctors looking at details as interest in HSAs grows

Personal Finance. By Katherine Vogt, AMNews staff. Dec. 20, 2004.

At a retreat for physicians earlier this year in Georgia, attorney Glen A. Reed had a hard time making it through his presentation on last year's Medicare reform legislation. His audience kept cutting him off to ask about a provision of the law that created health savings accounts, or HSAs, a new tax-advantaged way for consumers to set aside money for health care costs.

"They interrupted us with their questions because they immediately latched onto the tax issues," said Reed, a health law attorney with King & Spalding, LLP in Atlanta. "They were very interested in this." He said the physicians were interested in not only what HSAs could do for themselves and their families, but also how they might benefit their employees.

Those doctors are not alone. Interest in HSAs has begun to surge since they were established at the start of the year, and experts say the accounts are poised to become more widespread in the next two years.

According to a survey of 3,020 employers by the consulting firm Mercer, about 1% of all covered employees were in consumer-directed health plans, including HSAs, in 2004. But 14% of large employers said they were likely to offer a consumer-directed health plan in 2005, and 26% of all employers were likely to offer one by 2006. Most of those employers planned to offer HSAs.

Additionally, in recent weeks, the insurance giant Humana Inc. rolled out a health plan to be coupled with HSAs, UnitedHealth Group bought an HSA company called Definity Health, and the BlueCross BlueShield Assn. announced that it would offer HSA-compatible products nationwide by 2006.