Workforce.com

State Laws Stand in the Way of HSAs

State lawmakers are starting to understand the issue, and some are working to change their benefits laws.

June 1, 2005

In some states, laws regulating employee benefits are stunting the growth of health savings accounts, according to Business Insurance.

Under federal law, a health savings account must be linked with a health plan that has a deductible of at least $1,000 for single employees and $2,000 for families.

State health benefits laws are all over the board, and pose myriad problems. Some states, for example, require that employers offer plans with lower deductibles than the $1,000/$2,000 floors. Other states require that employers cover certain tests and procedures. That’s at odds with the basic idea of high-deductible plans and health savings accounts, in which the account is tapped until the deductible is reached. New Jersey, for example, requires employers to pay for tests of lead in children, Business Insurance reports.

Some state governments, prodded by lobbyists from health plans, are working to change their laws, but the process is moving at different paces--sometimes slower than employers would like--in each state.

For more information on health savings accounts, see “The Lowdown on Health Savings Accounts.”