Setting up a real health savings account program for a small employer is different from reading about the programs in a sales brochure.

Here are some lessons we have learned by administering real HSAs.

1 Technology Matters

If you really want to put employees in the drivers seat, they have to be able to see through the windshield. That means you have to give them access to information about their HSA account balances, investment options and health information through the same Web site.

For employees who don’t have Internet access, you have to deliver information through the telephone.

Administrators also have to come up with new procedures for working directly with medical providers to handle claims.

2 Banking Is A Big Deal

Employees need an automated claim-payment system that will give them the ability to pay the right amount while they are in the doctors office.

The payment system has to apply any network discounts or other discounts correctly.

Otherwise, if the HSA banking system fails to communicate properly with the claims adjustication system, employees will fall into the trap of overpaying at the doctor’s office. Once employees overpay, they will have to request reimbursements from the doctors. The employees then will have to figure out how to get the extra funds back into their pre-tax HSA accounts or face potential tax penalties.

3 Protect Against Early Expenses

Some employees will have big expenses early in the year, before contributions have accumulated in their HSAs.

One solution may be to create a credit line for these employeesan overdraft protection program. Of course, the last thing most benefits managers want to do is get into the loan business.

An independent HSA administrator could help by providing this credit line. Then, over the course of the next few months, the debt would be paid off with contributions into the HSA account.

Dr. Steve Neeleman is a practicing trauma surgeon and chief executive officer of HealthEquity Inc., Tucson, Ariz., a national HSA administrator. He can be reached at sneeleman@healthequity.com.


Reproduced from National Underwriter Edition, October 14, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.