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printer-friendly page + The KBM Advantage+ Health Savings Accounts (HSA)+ Health Reimbursement Arrangements (HRA)+ Flexible Spending Accounts (FSA)+ Sample Funding MechanismsConsumer Directed Health Plans are an old idea with a new twist. As a result of the Medicare Prescription Drug and Modernization Act of 2003, a tax sheltered savings vehicle was created to help encourage the development and implementation of high deductible health plans. Health Savings Accounts (HSA) are individual accounts that any person who is covered by a high deductible health plan ($1050 single, $2100 family) can utilize for the purposes of investing for future qualified health care expenses. Health Reimbursement Arrangements (HRA) also provides an opportunity for an employer to establish a Consumer Directed Health Plan as a viable health benefit. The increased cost of health care, as a result of new technology and higher demand, has become a national crisis in the United States. It is no longer feasible for employers to pay for the full cost of health insurance, and private insurance for individuals and families is very cost prohibitive. One way to reduce the premiums for health insurance is to have a policy that requires individuals and families to pay the first dollar costs for certain health care services. This encourages better utilization of those services and introduces the true cost of health care to the consumer. In most cases, the premiums for a high deductible health plan are reduced by an amount equal to, or greater than, the amount of the deductible applied to the policy. This creates the opportunity for the individual, or employer, to spend less on their overall health care. For instance, if a single person premium is reduced by $1,500 per year by changing to a health plan with a $1,500 deductible the savings in premium can be applied to the deductible. The tax savings associated with the funding of the deductible provides an even greater savings. The current health care environment has been affected by increased utilization of preventive medicine and pharmaceuticals which has led to dramatic increases in health insurance premiums. A surge in health care technology and mandated benefits by states has also contributed to these increases. The introduction of the (HSA) and opportunities for consumer research brought on, most notably, by the internet, have provided tools to help consumers make better health care decisions. By helping consumers recognize their role in this new environment they can alter their behavior to take advantage of it. For more information on how KBM Management can assist you in incorporating a Consumer Directed Health Plan into your Employee Benefit program please contact us at (800) 653-8305, or e-mail us at Answers@KBMemail.com + The KBM Advantage+ Health Savings Accounts (HSA)+ Health Reimbursement Arrangements (HRA)+ Flexible Spending Accounts (FSA)+ Sample Funding Mechanismse-mail...Solutions@KBMemail.comaddress...KBM Management, Inc.5860 Heritage Landing DriveEast Syracuse, New York 13057phone / fax...800.653.8305 / 315.449-3115 |
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