The Office of Personal Management (OPM) has begun a review process to identify way to offer HSAs – a combination of a high-deductible health insurance plan and an individual retirement account – to federal employees, the agency said in a news release. The OPM’s announcement comes the same week that the Treasury Department published guidelines to make HSAs available to US citizens at the start of the new year (See Feds Release HSA Guidance ).
“OPM will try to identify ways to help those in the federal team save some of their hard-earned money by looking for ways to provide access to HSAs in an effort to further the number of options available to them” through FEHBP, said OPM Director Kay Coles James.
Individuals, their employers or both can make pre-tax contributions to HSAs each year up to the amount of the plan’s annual deductible, but no more than $2,600 for individuals and $5,150 for families. About 3.1 million people in FEHBP could be eligible for HSAs, the OPM said in the release.
However, at this stage of the OPM’s investigation, it is still too early to tell whether the government would contribute to federal employee accounts, Stephen Benowitz, an OPM associate director, told the Washington Post. That decision is likely to come after an analysis of budget costs, Benowitz adds.
Benowitz did say the OPM was looking into the possibility of making HSAs available next year, despite the fact that the 2004 enrollment season has already drawn to a close. Insurance companies will be asked to include HSA proposals for 2005, he said.
Already, the OPM offers flexible spending accounts (FSA) to federal employees, which like HSAs cover expenses such as health insurance deductible and any co-payments for medical services. Unlike HSAs though, the tax-free dollars put into FSAs are forfeited at the end of the plan year and HSAs can also be used to purchase over-the-counter drugs and long-term care insurance, and to pay health insurance premiums during periods of unemployment (See House Bill Would Ease Health Account Rules ).