Medical Economics September 23, 2024
Study shows that health savings and flexible spending accounts may be driving up insurance premiums
A New York University study highlights potential concerns about tax-favored health care accounts’ broader economic impact on health care spending. The study estimates that around 22% of individuals aged 19 to 64 years with employer-sponsored insurance currently utilize tax-advantaged health savings options, primarily through Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs). The findings were published in JAMA Network Open.
Flexible Spending Accounts, first introduced in 1978, enable employees to allocate pre-tax dollars to cover qualified medical expenses. However, the funds in FSAs must be used within the same calendar year, as they are subject to the “use-it-or-lose-it” rule. By contrast, HSAs, created in...
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