Spiraling health-care costs are a fact of life for many American businesses and workers. Premiums for employer-sponsored health plans have risen 10% or more annually over the last several years. Faced with an aging workforce, a sluggish economic recovery and pressure on profits, many employers wonder whether they can continue to provide health coverage and still remain competitive in their industries.

Health savings accounts (HSAs) are emerging as a partial solution to this economic puzzle. Created by federal law in December 2003, HSAs are tax-advantaged investment accounts for medical expenses, available to participants in qualified high-deductible health insurance plans. A recent survey by Mercer Human Resources Consulting found that more than 70% of employers are likely to add HSAs to their benefit mix by 2006, while high-deductible plans have more than tripled since the introduction of HSAs.

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