Kansas Health

HSA "credit cards" on their way

[Tom Anderson, "HSA vendors want to add credit," Employee Benefit News, February 2005.]

Besides the now debunked claim that only the "healthy and wealthy" will benefit from health savings accounts, one of the oft-repeated concerns about the tools is that if someone takes out a high deductible insurance policy and then a major medical problem occurs before they have built up sufficient funds in their HSA, they will be in serious trouble. Some companies such as Golden Rule offer riders that assist policyholders with these potential costs during the first year of enrollment. Others are now beginning to also consider the option of offering credit:

"One roadblock to consumer-driven health care in HSAs is the cash flow issue to the employee participant," observes John Hickman, head of the health benefits practice at Alston & Bird LLC in Atlanta. Vendors want to offer HSA participants a credit line to help deal with health expenses early on, he says.

The IRS prohibits using an HSA to collateralize a loan, but vendors could offer a credit line based on the participant's credit worthiness, Hickman says. The credit offering would have to follow standard lending rules. The legal basis for credit is not so much a benefits law issue as an issue with banking and lending compliance, he says.

Univison Inc., a subsidiary of UnitedHealth Group that provides health benefits administration to large employers, is piloting a program to offer some form of credit with its HSA, says spokesman Daryl Richard. "We're in the R&D phase and considering different possibilities," Richard notes.

Vendors have already released debit HSA cards this year with multiple-purse capability, Hickman notes. He expects to see HSA cards with credit lines by the spring.