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How to provide an HSA: Are they right for your practice?

Health savings accounts are being pitched as a more affordable way for small businesses such as physician practices to offer health insurance. But finding the right HSA isn't easy, nor is selling the idea to employees.

By Katherine Vogt, amednews staff. March 27, 2006.

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Year after year, Steven Delaveris, DO, and his colleagues at the Millhon Clinic in Columbus, Ohio, faced double-digit increases on the health insurance premiums they paid for themselves and their employees. They were pinched between paying a soaring expense and offering a key benefit for their employees. It was a painful predicament that provoked a sharp reaction.

"Trying to take care of the staff here in light of the premium pressures we were experiencing as an employer really made us aggressive in terms of exploring the options," said Dr. Delaveris, a family physician.

After a short experiment with flexible spending accounts, the practice began offering health savings accounts -- high-deductible insurance plans paired with tax-advantaged health spending accounts -- to its employees about a year ago. And in January 2006, everyone was moved into that insurance vehicle.

The practice agreed to spend the same amount per employee as it had the year before on health insurance, but the conversion enabled it to afford to pay the full basic premium amount for individual employees and made their election for family coverage more affordable. And it helped the practice shield itself from the premium increases of traditional insurance.

The idea of offering health savings accounts is catching on at lightning pace at businesses nationwide. According to America's Health Insurance Plans, the insurance industry trade group, at least 3 million people now receive health coverage through high-deductible insurance plans that are offered, or could be offered, in conjunction with health savings accounts. That's nearly three times the enrollment a year ago.