The key for multiemployer health plans considering an HSA is to look at the account together with Health Reimbursement Arrangements (HRA) and decide which of the two options would be a better fit, according to Bulletin issued by consultants The Segal Company. Additionally, to assist multiemployer health plans considering either an HSA or HRA, Segal prepared an online chart comparing the two options at http://www.segalco.com/publications/presentations/HRAandHSAchart.pdf.
Segal found multiemployer plans should consider an HSA if they also want to offer a High Deductible Health Plan (HDHP) and are “looking for an option for employee contributions to a health savings account.” That is because of the unique characteristic of the HSA, which allow individuals to make tax-deductible contributions to an account that can be used to pay qualified medical expenses.
Thus, Segal finds some multiemployer plan trustees might be interested in an HSA as a “low-option” plan in which the multiemployer offers an HDHP and links it to an HSA. Going further, Segal suggests these plans also consider using an outside trustee for an HSA, plans that require a funded trust. “For some plan sponsors, the additional cost associated with using an outside trustee may be worthwhile because an outside trustee can ease administrative concerns and help ensure that HSAs are easily portable,” Segal said.
The Segal Company Bulletin , “Health Savings Accounts for Multiemployer Health Funds” is available at http://www.segalco.com/publications/bulletins/june04multiHSAs.pdf.