Consumer Driven Health Plans and Health Savings Accounts - Essay Example

ible Spending Accounts such as tax benefits to employees and employers, a portable health program, an attractive incentive program and an affordable approach to health care. They are preferable to other options because they offer portability and are less limited or risk-laden than the HSA. However, they do require a high deductible health plan. In determining the best type of health plan to offer our employees, the option of Health Savings Accounts presented itself as being the best choice for our company situation as a small but growing firm.

This paper describes what a Health Savings Account is, addresses the most unique advantages it has to offer with particular emphasis on the advantages offered to small companies and compares this type of program with other consumer driven health plans available. In addition, the disadvantages of Health Savings Accounts are discussed, common questions are posed with answers provided by the Department of Treasury and consumer feedback is offered. A Health Savings Account (HSA), an example of a consumer-driven health plan, offers a distinct alternative to the way in which we work with traditional health insurance programs such as Health Maintenance Organizations (HMO) or Preferred Provider Organizations (PPO).

One of the greatest advantages of HSAs is that they offer tax breaks that continue to grow wealthier because consumers decide for themselves how to spend less. Patients pay for a greater share of their health care directly and are given more control over the money in their HSA than they would have in more traditional plans. These plans are contingent on the use of a high-deductible health insurance plan that meets specific criteria, which functions to lower costs for employers as well as premiums for employees.

Decisions on what types of investments to make with the money are made by the individual consumers without relying on a third party employer relations expert or a health insurer. In addition, each person