New types of health insurance plans aimed at getting patients to act more like shoppers could get a crucial boost from the Internal Revenue Service this week.

        The IRS is widely expected to formally allow employees to roll over, tax-free, money that employers give them each year to help pay the out-of-pocket costs for certain high-deductible health care insurance policies.

        Although the relatively few companies that have adopted these plans commonly allow the rollovers, this has been a gray area under IRS regulations.

        That's a key point for employers who have hesitated to commit to the new plans. In theory, the new policies would lower companies' insurance premiums and offer workers an incentive to spend less on health care.

        Here's how the plans work: Employers provide high-deductible health insurance policies, whose premiums are cheaper than those for typical low-deductible health insurance. At the same time, companies also give employees a set dollar amount in individual worker accounts to help cover those deductibles. If the worker's account falls short of the deductible, the worker makes up the difference.

        Any money left in the accounts at the end of the year generally rolls over to the next, an added incentive for employees to be judicious about their use of health care services.

        Uncertainty over whether the IRS would eventually rule in favor of the rollovers has been one reason few employers have signed on to the new plans.

        “It's been acting as a logjam,” says Joe Walshe, a partner at PricewaterhouseCoopers, who consults with employers on health insurance and tax-related issues.

        The IRS would not comment on its expected ruling.

        But proponents of the new types of health plans, who have been in talks with the IRS, are optimistic.

        “We've learned the IRS wants to support what's currently taking place in the market,” says Jon Camola of the Wye River Group, a think tank that promotes the policies as a way to slow rising health costs.

        Nationally, fewer than 350,000 workers are covered by such plans, but many employers say they are considering offering them in 2003 and 2004. Backers say the policies will reduce health costs by getting patients to pay more attention to costs and weigh whether they really need an expensive test or prescription medication. Critics question whether the plans will save employers much money, and they fear the plans will discriminate against older, sicker workers.

        The accounts differ from the “flexible spending accounts” offered by many employers.

        Flexible spending accounts (FSAs) allow workers to set aside their own money, pretax, to cover medical expenses. Under current use-it-or-lose-it law, that money must be used up by the end of the year, or the workers' money reverts back to their employers. Consequently, many workers dash out at the end of the year and buy eyeglasses or other items to use up the accounts — or decide not to participate at all.

        A bill pending in Congress would allow workers in FSA plans to carry forward a maximum of $500 into the next year.

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