HSAs a health care reform winner?

Now that the health care overhaul bill has been signed into law, employers and individuals will likely be taking a closer look at using health savings accounts in conjunction with high-deductible health plans. The health care bill contains mandates that require individuals and employers with more than 50 workers to purchase health care coverage. “Those who will be subject to mandates in the future are looking for ways to control their costs before they get locked into something down the road,” said Roy Ramthum, president of HSA Consulting Services. “Employers are already moving to HSAs.” The accounts, which were first established in 2003, are intended to work with a high-deductible health plan. Users can put away tax-advantaged dollars that can be withdrawn without penalty as long as they're used to cover qualified medical expenses. HSA deposits will top $14 billion in assets this year, according to estimates from Devenir LLC, a firm that manages HSA investments. That number was closer to $1 billion in 2006. But a 2008 study from the Government Accountability Office concluded that HSA participants were mostly high-earners. Indeed, the accountholders had an average annual adjusted gross income of $139,000. The health care bill might add to the number of lower-income users. “The pool of people who are entering the market for health insurance may or may not be your typical HSA customer,” said Eric Remjeske, president of Devenir. “Some will either join out of self-selection or through their employers.” Mr. Remjeske added, however, that it's not entirely clear who will sign up for HSAs. “The economy also has something to do with it,” he said. “You won't be as inclined to contribute if you need the money for something else.” For their part, advisers also noted that it's too soon to get their clients thinking about the possible benefits of health-savings accounts. At the moment, investors are zeroed in on the tax implications of the reform bill rather than what it'll mean for their health care coverage, said J. Patrick Collins, principal at Greenspring Wealth Management Inc. The firm manages $87 million in assets. Mr. Collins' small-business clients — with 10 to 20 workers — are the ones who have been using HSAs for their employees. “We haven't heard too much from the clients on them,” he said. “But we still think the products will be attractive to people, depending on the size of their business and whether they get tax credits to offer coverage.”