Baltimore — Dec. 27
ConnectYourCare, a provider of health account administration solutions for employers, recognizes the positive effect H.R. 6111 has on the future of consumer-directed health care (CDH) and has prepared solutions to work with existing and prospective customers to adapt their CDH strategy to reap the benefits of these new guidelines.
The bill, which was signed by President Bush on Dec. 20, makes many of the health savings account (HSA) provisions effective for taxable years beginning Jan. 1.
“The law has added fuel to CDH by making HSAs more palatable to employers who have been on the fence about offering or proliferating them,” said Jamie Spriggs, ConnectYourCare president and COO. “We anticipate that most of our clients will want to take full advantage of this new law, and we see no problems in supporting transition strategies effective Jan. 1, 2007.”
Some of the more significant provisions that will affect HSA enrollees are:
Many industry experts agree this legislation will open the door to HSAs and retirement health savings for many more individuals, including Nav Ranajee, LaSalle Bank vice president of health care strategy.
“The new legislation will make it easier for individuals to steadily increase the amount of money they have invested in their HSAs by being able to roll over their FSAs, HRAs or IRAs and fully fund it every year at the maximum indexed amount regardless of the time of year,” Ranajee said.
Others view the bill favorably but think more needs to be done to help employees save for their future, including Jay Savan, Towers Perrin principal.
“The legislation helps, but we are projecting that HSAs won’t be enough for most employees’ post-retirement health care costs, even if they never spend a dime during their active employment,” he said. “We also advise that employers consider supplementing HSAs with Retirement accounts that are ‘vestible’ by employees to ensure something is left for retirement years.”