HSA Can You See?

by Will Wilkinson on May 24, 2005

Tim Lee has a good post on HSAs in response to this bit of Ygelasiasism. (By the way, if Matt’s claim that HSA’s will hasten the arrival of socialized medicine in America is not a fine, fine specimen of the pundit’s fallacy, then hope has never triumphed over intelligence.)

Gene Ennis

The better alternative to the HSA is the Health Reimbursement Arrangement or HRA Plan. Why? More flexibility and savings to employers, and less out of pocket expense to employees. Employers can purchase a much higher deductible health plan and use a portion of the premium savings to pay all or most of the new high deductible using a deductible gap HRA plan. The employee pays their old $250 or $500 deductible and the HRA picks up the rest if the expense occurs. The HRA benefits are 100% business write-off.

Another HRA option gaining popularity is the Premium Reimbursement HRA. The employer formerly drops their group health plan and funds an HRA to pay for individual health insurance which is normally up to 50% less than groups coverage.