HSA payments for covered medical expenses must first be "approved" by the insurers?

[Don Levit]

As many of you know, if employers meet basic safe harbor requirements, HSAs are not considered an employee welfare benefit plan even when employers contribute to the accounts. The HSA is not part of the health plan. Rather the HSA is a freestanding, individual financial trust that is used to fund health plan expenses.

The insurers' involvement in making sure the insured pays the "approved" amount from his HSA slows down the convenience of payment at the time of service.

Is this insurer involvement one that is customarily done, rather than legally mandated? Is this insurer "control" codified in any state or federal law?

Because the HSA does not need to be under the auspices of the insurer, maybe some of this insurer involvement in covered expenses under the deductible is unwarranted. What do you think?

Don Levit

[Gary Lesser]

It is not the insurer's responsiblity to verify that the amounts distributed from the HSA are tax-free withdrawals. Neither can an insurer require that an HSA make disbursements for qualified medical expenses (or any other expense) for that matter.

[Don Levit]

Gary:

Your reply seems to support my contention that insurers should have little or no involvement with slowing down HSA withdrawals for medical expenses, whether covered or not covered under the deductible.

Assuming the insured can negotiate a cash price equal to or below the network price, if in network or below the out of network price, if out of network, there should be no quarrel from the insurance company.

Instead of requiring that the bill first be submitted for repricing, simply allow the insured to pay the fee at the time of service.

Any thoughts?

Don Levit

[Guest jamescagney2000]

Don,

Insurers have no control over the HSA. I have never heard of any insurer that is doing this - but I don't see a Doctor giving the individual a better price then what was estiblished with the insurance company. Regardless, HSAs are 100% controlled and owned by the individual. If an insurance company is putting some conditions on the HSA, I would be very interested in knowing who they are!

JIM