But the survey also found that making these accounts available will require significant health plan design changes for many organizations.

Hewitt surveyed nearly 270 companies on the HSA provisions of the Medicare Modernization Act of 2003. It found that while 61 percent of employers are likely to offer HSAs in the near future, only one-third of all companies have the required design structure in place to do so.

"The law allows HSAs as part of a high-deductible health plan, which few companies currently offer," noted Allen Steinberg, retiree health care consultant, Hewitt Associates. "Companies interested in adding HSAs must offer a consumer-driven health care option for their employees, which represents a significant shift in thinking and strategy for many employers and a major change in the way employees would use their health benefits."

Effective this year, the Medicare law creates tax-free accounts--HSAs--for individuals covered by a high-deductible health plan (with at least a $1,000 annual deductible per individual or a $2,000 annual deductible per family). Individuals (or their employers) can fund these accounts on a pre-tax basis and accumulate nontaxable earnings. Those who have HSAs can roll over unused funds every year and use the money to pay for qualified medical expenses during their working career or retirement on a tax-free basis.

"HSAs are attractive to employees because of their unique tax benefits," added Steinberg. "Funds go into the account tax-free, earnings grow tax-free and, as long as the money is used for health care-related expenses, the money comes out tax-free."

Because change will be necessary before HSAs can be widely adopted, 67 percent of companies plan on educating their employees on HSAs and how to use them. This reflects the importance of educating employees as part of any transition to what some call "consumer-driven" health care.

"Employees often make better and more careful health care decisions when their own money is involved," said Steinberg. "HSAs are one way to enable and inspire that kind of positive behavior change."

On March 30, the Treasury Department and the Internal Revenue Service issued guidance that supplements that issued in December 2003. The March guidance provides:

• A preventive care safe harbor definition
  
  
• That prescription drugs may not be provided without the high deductible
  
  
• Transitional relief through 2006 for individuals covered by both a high deductible health plan and a separate prescription drug plan
  
  
• Transitional relief for medical expense reimbursements incurred after the establishment of a high deductible health plan but before the establishment of an HSA on or before April 15, 2005

Employers' final decisions on offering HSAs, however, will hinge in large measure on further regulations to be released in June from the Treasury Department and the IRS.

These will likely address key outstanding issues, such as the interaction between HSAs and other arrangements that employers may currently offer, including flexible spending accounts (FSAs) and health care reimbursement arrangements (HRAs), as well as the ability of employers to make matching contributions to HSAs.

"While there is still much to be learned about the new law, employer reaction is consistent with congressional intent to encourage use of these accounts and change thinking on how health care is purchased and consumed, ultimately enabling employees to have more control over how their health care dollars are spent," Steinberg concluded.