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HSAs Provide Opportunities Financial Institutions and Uninsured Both Benefit

Staggering increases in corporate health care costs and other current economic factors have created a new consumerism in the form of consumer-directed health plans, according to Bob Borneman, vice president of healthcare product development for TSYS Prepaid. The situation has created a "window of opportunity" in the form of health savings accounts (HSAs) for financial institutions, Borneman told an audience of the recent ATM & Debit Forum.

"Now that they have more accountability for their healthcare payments, consumers realize that they are more comfortable dealing with their banks than their health plans," he added.

Recent statistics and comments support the fact that the opportunity exists and show the rising awareness of the accounts.

The U.S. Census Bureau has said the number of Americans without health insurance rose by 800,000 last year to a record 45.8 million, and 21 million of them are full-time employees. Only about 5 percent currently seek insurance on their own, but the number is expected to grow quickly, according to Paul Zane Pilzer, economist and best-selling author, who also co-founded a company to provide health benefits to employees of Fortune 500 companies.

Benefits company Watson Wyatt recently identified personal account plans, including HSAs, as one of six major trends in health benefits today. Watson Wyatt said larger employers are generally already offering HSAs as well as Health Reimbursement Accounts as options to traditional health benefits plans.

Awareness of HSAs is increasing rapidly, according to a survey by the National Association for the Self-employed. That survey said that more than 82 percent of respondents had heard of an HSA. However, only 5.9 percent had established such an account. Still, nearly 65 percent of respondents who were uninsured expressed high interest in establishing an HSA.

Meanwhile, the politicians who support the move to self-insurance are climbing up on their soapboxes. Roy Ramthun, special assistant to President Bush on economic policy, told business leaders in Connecticut recently that he thinks HSAs will be the dominant form of health insurance in the next 5 to 10 years. And the President's brother, Jeb Bush, governor of Florida, joined his lieutenant governor Toni Jennings in opening a health-savings account to encourage employees of the state to do the same. Florida recently joined the host of other states in setting up HSA programs. To encourage their use, the state is offering up to $1,000 for state employees with dependents to start the accounts.

Copyright © 2005 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 15, No. 11, 11/05

First published on 11/01/2005

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