SOURCE: Lumenos

April 08, 2005 10:50 ET

Lumenos Introduces Next Generation Health Savings Account (HSA) Product

New Plan Offers Solution for Employers Who Want to Connect HRA and HSA Plan Designs

ALEXANDRIA, VA -- (MARKET WIRE) -- April 8, 2005 -- Consumer-driven health care pioneer Lumenos® (, which last year introduced the nation's first full-service Health Savings Account (HSA) product, announced a new transitional product for employers who want to move between a Health Reimbursement Account (HRA) plan and HSA plan, or add an HSA option alongside an existing HRA plan. The new plan alleviates concerns that consumers who switch from an HRA to an HSA plan would lose any balances in their Health Reimbursement Accounts. Employees who have accumulated balances in their HRAs and switch to an HSA plan can carry over any unused HRA dollars and use them to offset potential coinsurance expenses in the HSA plan.

"We've seen tremendous interest in HSA plans since we first began offering them last year, even among current clients who already offer our HRA product," said Chip Tooke, chief executive officer of Lumenos. "But those employers were concerned about what would happen to an employee's HRA balance if he or she switched to an HSA plan, since HSA and HRA money cannot be commingled. The new transitional product solves that issue."

HRA and HSA plans are the two leading types of consumer-driven health plans -- plans that engage consumers in the health care system by giving them more control of their health care dollars. Their goal is to improve quality and cost control by giving consumers incentives to spend their health care dollars wisely and do more to manage their health so they stay healthier.

Both HRA and HSA plans include health accounts that consumers can use to pay for routine medical expenses, from doctor visits to prescriptions. The accounts are offered in conjunction with a Traditional Health Coverage component that provides security against catastrophic medical costs. However HRAs are entirely funded by employer dollars, while both employers and employees can contribute to HSAs -- currently up to $5,250 for a family and $2,650 for individuals. What makes HSAs attractive to consumers is that they can be invested and they are portable, so an employee can take the account if he or she changes jobs, or even use it for post-retirement health expenses.

Tooke noted that HSAs, which first became available in 2004, offer the greatest potential to engage health care consumers, since consumers actually own their health accounts. "More and more employers are convinced that consumerism is the long-term solution to the quality and cost problems in the health care system, and the HSA is the most fully realized approach available. Our new transitional product makes it easier for employers to design a strategy for moving their employees into HSAs, or offering them a choice that includes both HSA and HRA options."

About Lumenos

Lumenos® is a pioneer in the Consumer-Driven Health Care industry. The Company's vision is to foster health care that actually cares about health. Lumenos' award winning approach empowers consumers with health accounts (including Health Reimbursement Accounts and Health Savings Accounts), information, services and incentives to become better informed about their health and engage in health-promoting behaviors. The Company's goal is to improve consumers' health outcomes, and by doing so, to achieve long-term cost efficiency for employers. Lumenos plans are available in all 50 states and are offered by many Fortune 500 companies. For more information on Lumenos, please visit

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