MANAGING HEALTH CARE PREMIUMS:

The Case for Consumer-Driven Health Care

Answering the call to help reduce premiums, curb renewal trends and better manage out-of-pocket expenses, Lindig Benefit Consultants, OABA's health insurance administrator, often recommends that employers evaluate new benefit designs and improved employee communication. For most small employers this means adopting a High Deductible Health Plan (HDHP) and a Health Savings Account (HSA) as at least one option from which employees can choose.

HSA Advantages
Effective January 1, 2004, HSA's provide employees the ability to pay for health care expenses tax-free and supplement retirement, providing more control over health care dollars. HSA's are like medical IRA's and MSA's in that:

• They allow employees to fund an interest-bearing account up to $2,600 a year for single and $5,150 for family, plus an additional $500 in 2004 for employees over age 55.
• Unused funds roll forward year after year, tax-deferred. Withdrawals for eligible medical expenses are 100% tax-free. Any other distributions are subject to the same tax penalties as IRA's (generally subject to taxes and a 10% penalty prior to age 65).
• They are 100% portable all accounts are custodial and go with an employee.
• They must be coupled with an HDHP with a minimum of $1,000 for individual and $2,000 for family coverage.
• They are not as restrictive for business owners to take full advantage of the tax deductions and ability to fund up to the annual maximum.
• They allow for employees to fund for future big-ticket medical expenses such as lasik surgery, glasses and orthodontia.

Contact OABA at (614) 326-7520, or bpeach@oaba.net to learn more on how Health Saving Accounts can help with your health insurance cost.