Employers show healthy concern for saving

NEW YORK — When workers throughout the country begin to change their health insurance coverage this fall, some may find their employer offers a new option: health savings accounts.

These accounts, coupled with high-deductible insurance plans, allow people to save money tax free — up to $3,000 for individuals and $5,950 for families in 2009 — to help pay for medical expenses not covered by insurance, such as over-the-counter drugs.

One feature that has fueled their popularity is that unused account balances accumulate and earn tax-free interest, allowing people to save during low medical expense years to cover higher cost years. HSA account holders over 55 can also make increased payments until they are eligible for Medicare (usually at age 65), making the accounts another arrow in their retirement-planning quiver.

How health savings started

Created in 2004 as part of an effort to encourage consumers to control the amount they spend on health care, HSAs are administered by banks, credit unions, insurance companies and some stand-alone companies. The accounts' popularity grew quickly. Surveys show enrollment in HSAs topped 6.1 million in 2008, from 438,000 in September 2004. Some industry observers forecast that more than 10 million people will enroll for 2009, as the number of employers that offer them grows.

According to business consulting firm Mercer LLC, 19 percent of employers will offer HSA-eligible plans as a way to lower their costs in 2009. "As employers continue to seek ways to maintain health care coverage, the lower premiums that are associated with high-deductible health plans are very attractive,” said David Josephs, head of

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