Tax breaks appealing; Health Savings Accounts rapidly gaining popularity (Milwaukee Journal Sentinel)

MILWAUKEE – Every time Kathleen Hirscher receives a bill for her health insurance, the premium is higher.

In response to this common problem, the 61-year-old retired nurse has been slowly raising her deductibles and co-pays. She and her husband Robert Hirscher, 71, a retired corporate controller, find appeal in the financial trade-off of a lower premium for a higher deductible.

Recently, that trade became even more appealing when the Milwaukee couple discovered Health Savings Accounts.

HSAs became available Jan. 1 to many people with high-deductible health insurance policies. For federal tax purposes, money put into an HSA can be deducted from income taxes, accumulates earnings on a tax-deferred basis and is tax free on withdrawal if used to pay medical bills.

HSAs are becoming increasingly popular. To get the best deal, a consumer has to shop carefully. Furthermore, not every policy with the threshold $ 1,000 deductible qualifies, because it also must meet other technical requirements.

In addition, Robert Hirscher had a hard time finding anyone who sold the accounts to individuals.

“When I looked into getting an HSA, I got blank stares from everybody,” Robert Hirscher said. Eventually, he found the State Bank of Howards Grove, a Sheboygan County institution that has been at the forefront of the individual HSA market.

Almost every day, the Wisconsin institution is getting a new competitor in the market for individual HSAs, says Dan Perrin, executive director of the HSA Coalition in Washington. A Web site maintained by his organization, www.hsainsider.com, is constantly expanding its list of insurance companies offering such plans as well as banks and companies selling them.

The Houston Chronicle August 16, 2004, Monday

 AVRUM D. LANK alank@journalsentinel.com

Copyright 2004 The Houston Chronicle Publishing Company
The Houston Chronicle

August 16, 2004, Monday 2 STAR EDITION