NCPA - National Center for Policy Analysis


June 30, 2010

Custodians and maintenance workers in the Adrian, Michigan school district are switching to a high-deductible health plan with a health savings account (HSAs).  The Blissfield, Madison and Onsted districts already provide these types of plans to some employees, as does Northwest Community Schools near Jackson. 

This is good news for the district and for the 15 employees covered by the new plan: 

  • Each employee will save more than $1,100 per year and the district will save about $17,500 annually.
  • Additionally, since the premiums from these high-deductible, consumer-driven plans increase at a much slower rate than conventional coverage, these savings will likely increase over time. 

According to the Mackinac Center: 

  • Statewide schools could save $451 million annually by switching all employees from the conventional low-deductible insurance coverage to HSAs.
  • Given faster rate increases on those conventional plans, over 10 years the savings would amount to $26 billion. 

School employees would also come out ahead, says Mackinac: 

  • Under these plans, districts deposit funds into a health savings account on behalf of each employee.
  • The money stays with the employee, even if he or she changes jobs, and contributions, earned interest and health expense withdrawals are all tax-free.
  • The money can be used to pay any qualified medical expense, and after the employee turns 65, can be used for anything, just like a traditional IRA.  

Source: Michael Van Beek, "Districts Save With Health Savings Accounts," Mackinac Center, June 29, 2010; based upon: Erik Gable, "Adrian school district, custodial employees reach agreement on insurance," Daily Telegram, June 23, 2010. 

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