HSAs to Carry Several Advantages

HSAs will allow enrollees to put in annually pre-tax amounts of up to $2,600 for individuals and up to $5,150 for families, with the money available for medical expenses. Unused amounts would earn interest and would remain available for later years, unlike amounts in flexible spending accounts that are forfeited if not used by the end of a year. In addition, those over age 55 could make additional catch-up contributions ($500 in 2004). Money in an HSA will be portable, meaning employees could take the accounts with them if they changed jobs. HSAs will be open to retirees, although only to those under age 65. OPM says it is considering whether HSAs can be added to the FEHB program for 2004 and that it will ask carriers to include them for the 2005 plan year.