"But at least partly because consumers just don't know about the relatively new health spending accounts, they are passing up what could be hundreds of millions of dollars in tax benefits at a time when rising health care costs are eating into the budgets of many families, experts say."

""Why are people walking down the street past a $100 bill? Why isn't every man, woman and child that is given an opportunity to open an HSA doing so?" said Kurt Stammberger, vice president of content and services for Vimo, a Web-based comparison shopping tool for health care and insurance."

"Created in 2004 with the Medicare prescription drug law, health savings accounts allow an employee to make tax-free contributions to a fund that can be used to pay out-of-pocket medical expenses. HSAs are typically tied to health insurance plans that offer employees lower monthly premiums in exchange for higher annual deductibles."

"Often called consumer-directed plans because they make employees more accountable for their medical expenses, high-deductible health insurance plans give businesses a way to offer health insurance at a lower cost, as well as help in the nationwide effort to control health care costs."

"A number of factors are responsible for underfunded HSAs, the experts say. They include thousands of people eligible for these accounts who aren't opening them, and those who have aren't contributing as much as they can, according to Vimo, which looked at data as of January 2006."

"Increasing contributions, experts say, may take education akin to that required to make retirement savings accounts mainstream years ago."

""Just like 401(k)s, it took companies a long time to figure out that you really got to sell your employees on opening" them, Stammberger said."

"Kirco Management did just that with Jeff Hurlbert, a property manager for the Troy-based company. Hurlbert has a health savings account attached to the high-deductible insurance plan he has through Kirco."

""It was another avenue to make some money," said Hurlbert, a healthy 38-year-old who used to pay higher premiums for insurance he hardly used."

"Ditto for Mike Nault, a construction estimator for Kirco, who insures his family with a high-deductible plan with an HSA."

"They rarely go to the doctor, said Nault, 54, though he was paying more than $2,000 a year in premium costs on a traditional plan. With an HSA, Nault says, he and his wife can use much of that money to pad a nest egg for future medical needs. "In our older age we'll use it up very nicely.""

"The number of HSAs is growing as companies learn more about them. According to a Watson Wyatt Worldwide Inc. survey released last month, 40 percent of the 573 companies surveyed plan to offer HSAs in 2008."

"Vimo, based in Mountain View, Calif., predicts as many as 50 million Americans could be covered by high-deductible health plans within four years. It's difficult to say how many of those plans will come with HSAs, said Tom Cochrane, Vimo's vice president of partner relations, but that number is at least several million."

"The federal government is encouraging more investment in health savings accounts. It raised the maximum contribution in 2007 to $2,850 for an individual and $5,650 for a family -- higher than many annual deductibles."

"The accounts are triple-tax advantaged in that the money goes in tax-free, can accumulate interest tax-free, and comes out tax-free if used for medical bills. HSA holders can grow their accounts each year and because they own them, can keep their accounts even if they leave an employer."

"And HSA account holders often earn better yields on those accounts than they do with regular savings accounts."

"Vimo blames the nationwide underfunding of health savings accounts partly on companies, who Vimo contends pocket the savings from high-deductible insurance plans rather than contribute
... read the whole article