"An Act relating to state employee health plans that give employees the option to select a high deductible health plan so as to qualify to establish a health savings account. "

Under a new federal law, Alaskans (and/or their employers) can contribute up to $2,600 annually into their Health Savings Account (HSA). Families are allowed up to $5,150 per year. This pre-tax money can be withdrawn from HSAs to pay for a wide range of health care services including, but not limited to, acupuncture, braille books, dental services, artificial limbs, and guide dogs. At the end of the year, residuals in the account roll over to add to the principle for the future.

HSAs must be accompanied by a High Deductible Health Plan (HDHP) to cover the cost of catastrophic injuries or illness. If an employer wants to ensure that there is an incentive for first-dollar expenditures to go for preventative care, benefits for physicals and selected appropriate tests can be part of the HDHP insurance package rather than paid for out of the HSA.

The potential benefits of HSAs are many:

• HSAs stay with a patient regardless of employer or employment status;
• HSA owners can roll over unused funds at the end of each year; Rolled over funds can result in large nest eggs available upon retirement;
• Perhaps most significantly, HSAs create incentives for HSA holders to use their health care dollars in an efficient manner. As more people participate, this will have positive ripple-effects on the health care marketplace as more consumers demand greater pricing, billing and quality transparency from providers.
• Patients who own HSAs call the shots in how they access the health care system. It eliminates "pre-approval" restrictions empowers them with the ability to pay promptly and in full for services they wish to purchase.

SB 94 simply requires that state employees have an HDHP option that qualifies an individual or an employer to make contributions into an HSA.

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