In my 11 years in this business, I have not seen anything as exciting for group and individual health insurance as Health Savings Accounts.  Employers see this as an opportunity to take better control of their rising costs. Employees see it as an attractive and cleaver benefit that can reduce their expenses and give them a savings tool. 

They are growing by the thousands.

Heres why:

There are two parts:  The HSA qualified health insurance plan (part one), and the Heath Savings Account itself (part two):

The HSA qualified health insurance plan (now available in Alabama!) is a lower cost health insurance plan.  It works like your auto insurance you have a deductible to meet first, then once that is met the insurance company picks up from there.  The money you save pays for part two.

Part two is the Health Savings Account think of it like a glorified checking account that you can put money into tax free (tax free for the employer and the employee!).  It operates more like an IRA or retirement plan than it does a checking account because it earns much better interest. Contributions are made however you see fit lump sums, payroll deductions, monthly deductions its your choice.

Many groups in Alabama are finding that they are able to reduce their monthly premiums on health insurance enough to fully fund their HSAs (and then some) with the savings.  That could eliminate 100% of their out-of-pocket expense for healthcare and prescriptions not even a co-payment!   Employees access funds via their HSA debit card or checkbook to pay for health services.  Of course, if you would prefer that money to build up in the account (as a wise investor should) you can pay the claim out of your pocket, and let that money continue to earn interest tax free!  In addition, the IRS allows you to use that money, tax free, for other medical expenses that your health insurance typically does not cover - like laser eye surgery, eyewear, or your portion of your dental bill.

HSA's put the consumer more in control of their healthcare spending.  Studies show that 85% of have funds remaining at the end of the plan year!   That money carries over for the next year. Those employees will now get to keep that money that was going to the insurance companies (and the government in taxes!).  It rewards healthy employees and gives incentives to become a health conscious, better educated consumer.

HSA's are available for groups of all sizes as well as the self employed.  With the proper education, HSA's are the smartest programs to come along in decades.