Health Savings Accounts – An American Innovation in Health Insurance

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INTRODUCTON – The term “health insurance” is commonly used in the United States to describe any program that helps pay for medical expenses, whether through privately purchased insurance, social insurance or a non-insurance social welfare program funded by the government. Synonyms for this usage include “health coverage,” “health care coverage” and “health benefits” and “medical insurance.” In a more technical sense, the term is used to describe any form of insurance that provides protection against injury or illness.

In America, the health insurance industry has changed rapidly during the last few decades. In the 1970’s most people who had health insurance had indemnity insurance. Indemnity insurance is often called fee-forservice. It is the traditional health insurance in which the medical provider (usually a doctor or hospital) is paid a fee for each service provided to the patient covered under the policy 心臟科. An important category associated with the indemnity plans is that of consumer driven health care (CDHC). Consumer-directed health plans allow individuals and families to have greater control over their health care, including when and how they access care, what types of care they receive and how much they spend on health care services.

These plans are however associated with higher deductibles that the insured have to pay from their pocket before they can claim insurance money. Consumer driven health care plans include Health Reimbursement Plans (HRAs), Flexible Spending Accounts (FSAs), high deductible health plans (HDHps), Archer Medical Savings Accounts (MSAs) and Health Savings Accounts (HSAs). Of these, the Health Savings Accounts are the most recent and they have witnessed rapid growth during the last decade.

WHAT IS A HEALTH SAVINGS ACCOUNT?

A Health Savings Account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States. The funds contributed to the account are not subject to federal income tax at the time of deposit. These may be used to pay for qualified medical expenses at any time without federal tax liability.

Another feature is that the funds contributed to Health Savings Account roll over and accumulate year over year if not spent. These can be withdrawn by the employees at the time of retirement without any tax liabilities. Withdrawals for qualified expenses and interest earned are also not subject to federal income taxes. According to the U.S. Treasury Office, ‘A Health Savings Account is an alternative to traditional health insurance; it is a savings product that offers a different way for consumers to pay for their health care.

HSA’s enable you to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax-free basis.’ Thus the Health Savings Account is an effort to increase the efficiency of the American health care system and to encourage people to be more responsible and prudent towards their health care needs. It falls in the category of consumer driven health care plans.

HIPAA stands for Health Insurance Portability and Accountability Act. When I hear people talking about HIPAA, they are usually not talking about the original Act. They are talking about the Privacy Rule that was issued as a result of the HIPAA in the form of a Notice of Health Information Practices.

The United States Department of Health & Human Services official Summary of the HIPAA Privacy Rule is 25 pages long, and that is just a summary of the key elements. So as you can imagine, it covers a lot of ground. What I would like to offer you here is a summary of the basics of the Privacy Rule.

When it was enacted in 1996, the Privacy Rule established guidelines for the protection of individuals’s health information. The guidelines are written such that they make sure that an individual’s health records are protected while at the same time allowing needed information to be released in the course of providing health care and protecting the public’s health and well being. In other words, not just anyone can see a person’s health records. But, if you want someone such as a health provider to see your records, you can sign a release giving them access to your records.

So just what is your health information and where does it come from? Your health information is held or transmitted by health plans, health care clearinghouses, and health care providers. These are called covered entities in the wording of the rule.

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