MADISON, Wis. – With the public's increased interest in Health Savings Accounts (HSAs), CUNA Mutual Group has launched an administrative support program to help credit unions offer HSAs to their members. Set to kickoff on April 1, CUNA Mutual's HSA administrative support program will offer credit unions access to services including operational forms needed to manage an HSA program, toll-free call center support to answer all HSA questions, tax reporting for the 2005 tax year beginning in 2006, training for credit union staff, and marketing tools to boost member awareness and education. HSAs are U.S. government-sponsored individual investment accounts designed to help people save for current and future qualified medical expenses. Individuals can make tax-deductible contributions, earn tax-free interest on contributions and withdraw money tax-free. In addition, unlike a flexible spending account, with its "use it or lose it" rule that forces workers to forfeit funds not spent within a year, any unused HSA money stays in the account until spent. Used in conjunction with a high-deductible health plan to encourage wiser health care spending while motivating consumers to shop for the best value, HSAs have a minimum $1,000 deductible for self-only coverage and $2,000 for family coverage. "HSAs are a key component of the Bush Administration's health care agenda. The Treasury Department has been advocating the benefits of HSAs, and NCUA Chairman JoAnn Johnson has encouraged credit unions to consider offering HSAs to their members, so we feel it's very timely for CUNA Mutual to introduce its HSA support program to credit unions," said CUNA Mutual IRA Compliance Manager Dennis Zuehlke. According to Zuehlke, HSAs benefit credit unions by creating a new source of deposit growth similar to IRAs, plus non-interest income potential from administrative and transaction fees. "They [HSAs] also build and enhance relationships with small businesses and help strengthen the bond between the credit union and the member," said Zuehlke. Zuehlke adds that other HSA member benefits include the following: * Protection by providing a source to fund future medical expenses not covered by insurance. * Affordability – High deductibles result in lower insurance premiums. * Portability – The member owns the HSA even after a job change. * Savings – Contributions are made with pre-tax dollar: employer contributions are tax-free and the member gets a deduction for other contributions. Earnings accumulate in the HSA on a tax-deferred basis. Distributions to pay medical expenses are tax-free. * Flexibility – Contributions can be made for a year at any time during the year or until April 15 of the next year. HSA critics argue that HSAs shift the cost and burden of health coverage from the employer to the consumer and appeal to healthy people who are less likely to spend all the money in their accounts, providing a tax-free way to save money. Despite the critics, HSAs are slowly gaining popularity with individual consumers as a Society of Human Resource Management report finds that of the 438,000 people who purchased HSAs in the first nine months of 2004, more than four-fifths were individuals purchasing their own plans. Employers are also looking to offer HSAs as a Hewitt Associates survey finds that 61% of businesses intend to offer a high-deductible health plan option to their employees in 2005, while data from Mercer Human Resource Consulting indicates 81% of large employers will do so in 2006. [email protected]