The health savings account (HSA) has only been around since 2003. It is similar to an IRA in some ways, yet the money can only be used for medical expenses. You must be under the age of 64 to have a HSA and they must always be accompanied by a HDHP, which is a high deductible health plan. They are two different things. The savings account is not part of the insurance policy, but is used to pay the high deductible and other expenses that the insurance policy may not cover.
People seem to really like this type of plan because the money they put in is considered pre-tax dollars, and if there is any money in the plan you are saving for retirement, it is tax deferred. It is a win-win situation for the employee and the employer because the cost of the plan is less.
The Minnesota Department of Health did a report for all the states, and found that last year health care expenditure was $5,283 per person. Some of this is because premiums of regular health plans are so steep. With figures like this it is important to try and cut down on the cost.
Employers have found that in order to keep employees from turning to other companies, it is vital to offer a good health plan. They can also put money into the employee health savings account as long as the combined amount does not go over the yearly limit. Helping the employee with this expense in most cases is less costly than training new hires.
This type of plan has no co-pays or prescription plan. The doctor visits and prescriptions must be paid, however they are subtracted from the deductible. Once the deductible has been met, the insurance company will start paying on claims. In some ways this sound like it would be extremely expensive, but take a few things into consideration before making that decision.
You save money by not having to pay so much income tax since the savings account is considered pre-tax dollars. Your savings account is drawing interest at the same time. The premiums are much less that you would be paying for a low deductible plan. The money out-of-pocket may very well be less by using a health savings plan with a high deductible health plan.
The choice is yours, but feel free to talk to an insurance representative to get all your questions answered. Having good health care is very important, but saving money runs a close second.