Companies looking for ways to cut costs in a competitive marketplace are increasingly looking to health insurance as a source of savings. While that's not good news for employees, it does represent something of a trend -- employees purchasing their own health insurance or filling in the gaps left by workplace budget cuts.



In Texas, however, there's more commonly another situation: employees not having health insurance at all. Experts say the primary reason for the state having the highest percentage of uninsured residents in the nation -- roughly 25% -- is cost, employers simply not being able, or at least wanting, to afford the premiums.

The problem of higher health care costs is not isolated to Texas, of course. Nationwide, so-called "legacy" health care costs have forced employers such as General Motors and other domestic automakers which negotiated benefits packages with workers and unions to look for ways to trim those costs.

Yet in Dallas, Houston and Austin, where the percentage of uninsured is typically greatest, being without health insurance is even more commonplace.

Employees faced with no health insurance are clearly looking for options, one being Health Savings Accounts, which provide workers the ability to save for medical expenses on a tax-free basis while having a high-deductible health insurance policy to cover large medical bills.

More and more Texas residents are considering the Health Savings Account option, which includes both a high-deductible health insurance policy for large medical bills and an investment or retirement account from which the consumer can pay for medical care. If the money in the savings portion isn't used, it accumulates with tax-free interest until the age of 65, after which time the consumer is able to withdraw the money and use it for any purpose. At that point, the money is subject to normal income tax.

Anyone under the age of 65 with a qualified high-deductible health insurance policy can open an HSA. Not all policies may be qualified under IRS rules, which include minimum deductibles which also determine the maximum amount of the contribution by the consumer. Those signing up should ask whether the insurance company's high-deductible plan is "HSA-qualified," since not all high-deductible plans meet the IRS requirements.

To qualify as an HSA-eligible policy in 2007, your health insurance plan must have a deductible of at least $1,100 for individual coverage or $2,200 for families. You can then make a contribution to your HSA up to the amount of the deductible each year. If you're buying an individual plan, be sure to ask your health insurance company if it is an "HSA qualified" high deductible plan. Not all high deductible plans are eligible, or "qualified".

Another option is for an employee to take advantage of any limited benefit medical insurance policies offered to part-time or temporary workers who might not be eligible for a comprehensive group medical benefits plan. While the plan will likely offer less coverage, it likely will reimburse for most, if not all, of the cost for routine and preventive services. The limitations may include fewer visits to a doctor and a total limit on benefits --perhaps as little as $2,000 annually. Those plans are unlikely to cover medical services such as surgery and hospitalization.

The major downside of a limited benefit plan includes the lack of coverage for so-called catastrophic hospital bills, something that could occur when the policy's limitations are reached.

There are also insurance policies that offer cash benefits for conditions such as cancer, heart disease and stroke. The limited cash benefits would cover treatments and nursing care, but consumer advocates point to the specific coverage (for certain diseases or conditions) as major limitations that should have consumers looking elsewhere.