Benefits Article: Medicare Reform, Health Savings Accounts, and the Future of Consumer Directed Health Care
6/28/2004
Written by Mintz Levin Member, Alden J. Bianchi, Esq.
President Bush signed the Medicare Prescription Drug, Improvement and Modernization Act of 2003 on December 8, 2003. The Act makes sweeping changes to underlying structures of Medicare, adds a Medicare prescription drug benefit, and establishes a special subsidy to encourage employers to provide prescription drug coverage. But from the employer's perspective, the Act's most important feature is the introduction of a new type of account - the "Health Savings Account" or "HSA" - the purpose of which is to provide individuals with a tax advantage, participant-owned vehicle that allows them to accumulate funds for health care and other purposes.
The article also discusses "consumer driven health care" (CDHC), arrangements which seek to lower the cost of health care by involving individuals in their own health care and providing monetary incentives in the form of tax-advantaged savings. As many are aware, sustained, double digit increases in employer-based health coverage have left many companies searching for ways to constrain health care costs.
Alden J. Bianchi is the practice group leader of Mintz Levin's employee benefits and executive compensation practice. Alden has written and lectured extensively on employee benefits issues. He is the author of three books: Employee Benefits for the Contingent Workforce and Plan Disqualification and ERISA Litigation (both published by Tax Management, Inc.), and Benefits Compliance (published by World-at-Work), and dozens of benefits-related articles. His speaking engagements include presentations to the American Bar Association, American Insurance Group, Deloitte & Touche, PricewaterhouseCoopers, Salomon Smith Barney, UBS, ING Financial Services and the Risk Insurance Management Society, as well as a host of bar groups and professional, educational and civic organizations.
