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NCUA Vice Chairman Emphasizes Role of Health Savings Accounts in Maintaining Healthy Economy

October 12, 2006, Alexandria, VA – National Credit Union Administration (NCUA) Vice Chairman Rodney E. Hood visited Vision Financial Federal Credit Union this week and addressed a gathering of credit union managers and CEO’s from across the state of North Carolina. During his remarks, the Vice Chairman discussed his regulatory philosophy and praised credit unions for stimulating economic growth. Vice Chairman Hood also stressed the importance of quality healthcare in maintaining our strong economy and encouraged credit unions to explore offering Health Savings Accounts to their members.

“I am very proud of how credit unions are empowering more and more Americans to own homes and start businesses, “said Vice Chairman Hood. “The partnership should not end there, however. As your members’ businesses succeed, they will be seeking ways to best meet the health care needs of their employees. Rising health care costs are a burden on them, and they will be faced with providing expensive coverage for their employees, or no coverage at all. Rising health care costs can ultimately prevent a small business from hiring employees, which is truly a detriment to our economy. I believe that Health Savings Accounts are a very effective approach for credit unions to use in order to help their members’ small businesses thrive while fulfilling their primary responsibility of providing quality health care.”

Health Savings Accounts (HSAs) were created by the "Medicare Prescription Drug, Improvement and Modernization Act of 2003," signed into law by President Bush on December 8, 2003. Health Savings Accounts provide quality health care at a tax advantaged basis.
Any adult who is covered by a high-deductible health plan and has no other first-dollar coverage may establish an HSA. To encourage saving for health expenses after retirement, individuals age 55 and older are allowed to make additional catch-up contributions to their HSAs. Once an individual enrolls in Medicare they are no longer eligible to contribute to their HSA. Amounts contributed to an HSA belong to the account holder and are completely portable. Funds in the account can grow tax-free through investment earnings, similar to an IRA. Funds distributed from the HSA are tax-free if they are used for qualified medical expenses, and unused funds remain available for use in later years. For more information regarding Health Savings Accounts, please visit the Department of Treasury website at: http://www.ustreas.gov/offices/public-affairs/hsa/about.shtml

“President Bush believes that America is strongest when Americans have a stake in their own future,” said Vice Chairman Hood. “Health Savings Accounts will grant credit union members a stake in their own health and well being by assigning members the responsibility of health care purchasing decisions as well as the opportunity to prioritize and budget their health expenses. Money that is not spent in one year can roll over to the next, indefinitely. This is a logical plan that will effectively empower consumers.”

Vice Chairman Hood noted that credit unions should be leading the way, not following, in meeting the most important needs of members. “According to a recent report, credit unions have fallen significantly behind banks when it comes to offering Health Savings Accounts,” said Hood. “If America’s credit unions don’t look out for the health of those they serve, who will? The train is leaving the station and America’s credit unions absolutely must be on board. I can not think of a better way for a credit union to illustrate the ‘people helping people’ philosophy than by offering their members the opportunity to have ownership of quality health care for their families and employees.”

The National Credit Union Administration is the independent federal agency that charters and supervises federal credit unions. NCUA, with the backing of the full faith and credit of the U.S. government, operates and manages the National Credit Union Share Insurance Fund, insuring the savings of over 85 million account holders in all federal credit unions and the majority of state-chartered credit unions.