Health savings account option available via GuideStone in ’06
DALLAS (BP)--GuideStone Financial Resources of the Southern Baptist Convention will make available for 2006 a new qualified high-deductible health plan (HDHP) with an accompanying health savings account (HSA).
GuideStone’s Health Saver 2600 health plan is designed specifically to meet the requirements of a federally qualified HDHP. By enrolling in the Health Saver 2600 plan, eligible employees of Southern Baptist churches and organizations can open an HSA through Highmark Blue Cross Blue Shield (Highmark).
An HSA is a special tax-advantaged savings account similar to an IRA but intended only to be used for medical expenses. This new “consumer-centered” approach to healthcare is available to people whose only health care coverage is provided through a qualified HDHP like GuideStone’s Health Saver 2600.
“While national healthcare costs continue to rise, GuideStone has been able to hold down rate increases for many of its participants,” said Douglas D. Day, executive director of benefit services at GuideStone. “In 2005, over 40 percent of our Personal Plans medical plan participants received a rate decrease and over 55 percent will receive a rate decrease for 2006. In fact, GuideStone’s Personal Plans medical plans have had zero percentage medical inflation for the past two years compared to 12-14 percent per year for the insurance industry.
“GuideStone is continuing to seek new ways to help our participants save money,” Day said. “HSAs encourage individuals to become more involved in their healthcare decisions by giving them more control over their healthcare dollars and greater incentive to spend those dollars wisely.”
Since the deductible (or amount one has to pay before HDHPs begin to cover benefits) is high, establishing an HSA to self-fund out-of-pocket healthcare expenses may help consumers save money.
“Because the Health Saver 2600 has a high deductible, $2,600 for an individual and $5,200 for a family, you pay a lower monthly rate than you would for a health plan with a lower deductible,” Day explained. “As a Health Saver 2600 participant, you can choose to withdraw money from your HSA to pay healthcare expenses as they incur or you can choose to accumulate funds in the account for future healthcare needs.”
HSA account holders are able to choose how to invest their account dollars, whether they need ready access to their contributions or want to consider longer-term growth potential. GuideStone participants who open an HSA through Highmark will invest their HSA monies in GuideStone Funds, a family of Christian-based, socially screened registered mutual funds representing virtually every major asset class, style and security diversification.
HSAs provide tax advantages to the account holder. Contributions and earnings are exempt from federal income taxes, and distributions also are tax-exempt as long as they are used for eligible medical services. Every year, the money not spent will stay in the account and gain interest tax-free, just like an IRA. Unused amounts remain available for later years, and because the account is owned by the individual, not the employer, an individual can keep his HSA if he changes employers.
To encourage individuals to get the important preventive care they need, federal law allows HDHPs to offer “first dollar” coverage for certain preventive care services. GuideStone’s Health Saver 2600 plan pays 80 percent of the cost of eligible preventive care services received from a Blue Cross Blue Shield PPO network provider. Participants do not have to meet the individual or family deductible before the plan begins to pay benefits for these services.
In addition to HSAs, GuideStone also offers health reimbursement arrangements (HRAs). This employer-sponsored arrangement reimburses employees tax-free for eligible healthcare expenses not covered by the employee’s health plan. This allows employers to transition to lower-cost, higher-deductible health plans to save money. By using the HRA to pay a portion of its employees’ increased out-of-pocket expenses, the employer can offset the higher deductible of the plan for its employees.
“When individuals are given more control over how to spend their own money on healthcare, they make better decisions,” Day said. “We believe consumer-directed healthcare like HSAs and HRAs will become a popular option for individuals and employers looking to save money on healthcare.”
For further information, including a prospectus outlining the investment objectives, risks, charges and expenses of GuideStone funds, call 1-800-262-0511 or visit www.GuideStone.org.
