EAGAN, Minn., Dec. 1 /PRNewswire/ -- Taking the idea of health savings accounts (HSAs) to a new level, health care consumers now have the ability to invest some of their own health care dollars in self-managed investments and a broader choice of mutual funds. The innovation is available in Minnesota only in health savings accounts offered with Blue Cross and Blue Shield of Minnesota’s health plans.
An agreement with The Charles Schwab Trust Company, a subsidiary of The Charles Schwab Corporation, makes these investment options available for the health savings accounts in conjunction with Blue Cross’ Options Blue suite of consumer-directed health plans. The arrangement features a self-directed brokerage account, as well as 10 mutual funds from the Schwab OneSource(R) mutual fund program selected by Devenir, a registered investment advisor.
“The Options Blue approach allows individual consumers to own and control their health care dollars, and now, for the first time, they can make their own investments from the money in their account,” said Richard Neuner, senior vice president and chief marketing officer at Blue Cross. “No other health plan in Minnesota that we know of has a relationship that makes available self-managed investment accounts or this breadth of mutual fund families. Currently, other banks and health plans offer HSAs with only interest-bearing accounts or a few mutual funds belonging to one financial institution.”
For this new Options Blue feature, a portion of the member’s health savings account can be moved into an investment account. Once the investment account reaches a certain level, the member can open a self-directed brokerage account with Schwab. The self-directed account option is a self-managed account that provides access to more than 2,500 mutual funds, as well as individual stocks, bonds, and other investments. Schwab also provides a variety of online tools and resources at schwab.com to guide consumers through the investment process. Devenir will provide additional member education as well as ongoing investment advisory services and support.
In addition to the HSA accounts and Blue Cross health plans, the Options Blue suite of products includes health reimbursement accounts, flexible spending accounts, and can set up contributions for cafeteria plans, which Neuner said is a level of integration that few, if any, financial institutions can provide.
About HSAs
Health savings accounts have steadily gained momentum in the marketplace since the Medicare Prescription Drug and Modernization Act made them possible at the beginning of the year. They are especially attractive to small businesses and self-employed persons who may not be able to afford traditional health plans. Blue Cross was among the first health plans nationally to pair its health plans with health savings accounts.
Consumer-directed approaches like Options Blue aim to educate consumers and empower them to make better spending decisions, which can help control health care costs. Employers benefit from these accounts because they offer important tax advantages, employer contributions are optional, and the combination of spending accounts and high deductible plans lead to lower premiums and more predictability in their health care spending.
For consumers, plans like Options Blue give them more control over health care decisions. Here’s how they work. A high-deductible health plan is paired with a health savings account. The member withdraws money from her or his health savings account as needed to pay for health care expenses - even ones not covered by traditional health plans, such as laser eye surgery or alternative care treatments. Meanwhile, unused money in the account earns interest or can be invested. The account belongs to the employee. Any year-end balance rolls over to the next year and continues to accumulate - unlike “use it or lose it” flexible spending accounts. The accounts carry significant tax advantages, and the accounts are portable, meaning the account goes with the consumer if they leave the employer. A variety of online cost and quality tools are available to help consumers make decisions.
“These accounts will continue to grow in popularity because consumers get the choice and control they want and employers get some relief from rising costs,” Neuner said, adding that consumer directed accounts have already contributed to slowing premium increases at Blue Cross. “Recent national reports suggest that the tax benefits of HSAs have helped previously uninsured and lower-income people afford health insurance.”
Blue Cross and Blue Shield of Minnesota, with headquarters in the St. Paul suburb of Eagan, was chartered in 1933 as Minnesota’s first health plan and continues to carry out its charter mission today: to promote a wider, more economical and timely availability of health services for the people of Minnesota. A not-for-profit, taxable organization, Blue Cross is the largest health plan based in Minnesota, covering 2.6 million members in Minnesota and nationally through its health plans or plans administered by its affiliated companies. Blue Cross and Blue Shield of Minnesota is an independent licensee of the Blue Cross and Blue Shield Association, headquartered in Chicago.
Blue Cross and Blue Shield of Minnesota
CONTACT: Joel Swanson, +1-651-662-2882, or Pager, +1-651-629-3961,or Karl Oestreich, +1-651-662-1502, or Pager, +1-651-610-7422, both of BlueCross