Is a Health Savings Account for you?

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KANSAS CITY, Mo. -- It's that time of year for enrollment in health insurance at work. More employers are offering plans tied to Health Savings Accounts or HSAs. The idea is that you'll spend your health care dollars wisely when you're using your own money.

Lesley Gagnon works for Mercer, consulting employers on health insurance plans. Three years ago, she picked a high deductible plan for herself.

"I liked the fact that it has lower premiums. That has an obvious draw," said Gagnon.

Having that plan allowed Gagnon to open a Health Savings Account. Next year, you can put in up to $3,300 for an individual or $6,550 for a family. That goes toward out-of-pocket health care expenses. Your employer can contribute. It's tax-free money going in and coming out.

Unlike Flexible Spending Acccounts or FSAs, HSAs are savings accounts. Unused money rolls over from year to year.

"Also because it's owned by the employee, it's also portable. So as an employee leaves an organization, that is his or her money," said Mark Whiting of Mercer.

Whiting knows HSAs are attractive to employers as a way to potentially lower their expenses. Critics say they're bad for lower income, less healthy workers since you must pay more out of pocket before coverage kicks in. The minimum deductible is $1,250 for an individual and $2,500 for a family next year.

Whiting acknowledges that if an HSA is offered to you for the first time, "And you know next year, you're going to have a lot of medical expenses, you now you're gonna hit your deductible and your out-of-pocket, this may not be a play for you."

Critics say HSAs may encourage people to not seek medical care. Gagnon said that hasn't been the case for her.

"It does make you think twice because it's coming out of your own pocket, but I think it makes us smarter consumers," she said.

She says those with HSAs look more closely at the cost of everything from prescriptions to doctors' visits to surgery.

This year, one out of five American workers has an HSA. That's four times more than in 2007. The numbers are only expected to grow.

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