As costs for health care continue to rise, you have important decisions to make when it comes to the interests of your employees as well as your company's bottom line. If you want new and innovative vehicles that can help you control costs without hampering the quality of care, health savings accounts (HSAs) could be the answer you are looking for. Adopting HSAs will not only help you rein in the costs, it will give your employees more power and control over their own health care.

The "101" on HSAs

A key component of consumer-driven health care, HSAs give employees and their families a tax-advantaged, interest-earning savings account that can be used to cover medical expenses. Employers and employees can both contribute funds to HSAs, though annual contributions are capped. Benefits include:

• Affordable coverage ­ with HSAs, employees pay lower monthly premiums
• Tax breaks ­ employers can deduct contributions made to employees' plans and employees benefit from tax deductions and tax-free interest and earnings
• Availability and portability ­ funds can be rolled over from one year to the next, and move with the employee from job to job

HSAs provide tax-advantaged ways for employees to pay for out-of-pocket health care expenses, and hence encourage saving for future health care expenses ­ empowering consumers to take greater financial control over their health care. Greater financial responsibility, in turn, can drive desirable employee behaviors, such as participation in wellness programs, which results in decreased absenteeism and increased productivity.

Setting the record straight

In spite of the fact that adoption rates have continued to climb over the years, several myths surround HSAs. In order to make the decision best for your organization, it is important to understand the real assets of the plans.

Myth #1: Employees with HSAs will sometimes forego needed medical care. In reality, according to a June 2005 McKinsey & Company report, HSAs increase consumer awareness, and consumers are 25 percent more likely to engage in healthy behavior, 30 percent more likely to get annual physicals, and 50 percent more likely to seek less-expensive care.

Myth #2: Employees will not easily enroll in the plans. You may also be concerned about the popularity of the plans and whether the employees will welcome them. In actuality, since their inception, HSAs have grown in popularity and it is estimated that by 2010, 14 million consumers will be enrolled in the plans.

Myth #3: HSAs only transfer costs from employers to employees. The truth is that given the current state of health care and the looming health care crisis in the country, it is imperative that consumers become more engaged and accountable in the health care decision-making process. By involving consumers at a closer level and allowing them to control their own health, HSAs prepare consumers against excess and fraud in health care, bringing down overall spending. Given the skyrocketing costs, more employers, without HSAs, might stop insurance offerings altogether and rationally need employees to share responsibility for health care.

Once you have armed yourself with knowledge against these myths, it is important to be prepared to discuss them openly with your organization.

How do you know if HSAs are right for your company?

Every company is different and the first step toward implementing HSAs in your organization is, of course, empowering yourself with knowledge to decide if these plans are right for you.

Do your homework. There is great information to be found online that can answer all your basic questions on HSAs. After you have the fundamentals down, discuss your needs with your broker and/or the health benefits company. Use the opportunity to fill gaps in your knowledge and weigh various options to decide if HSAs make sense for your organization.

Once you decide HSAs are right for your company and you move forward with the implementation phase, make sure that you start communicating the plans with your employees. Education about the plans needs to begin early, due to the learning curve involved.

By introducing these plans into your organization and doing so comfortably, you're helping provide your company's employees with an incentive to utilize health services wisely and the ability to gain more control over health care expenses. At the same time, you're helping the system by supporting consumer engagement, making consumers smarter about their health care choices, and lowering costs overall.

Elizabeth Bierbower is Vice President of Product Innovation for Humana, (www.humana.com). Beth is responsible for Humana's consumer strategy as well as its product development activities.