Health Savings Accounts (HSA's) are proliferating as a solution for rising insurance premiums.  HSA's require implementation of high deductible insurance plans and can be an effective alternative for some workers.  By reducing your  insurance coverage, you in turn pay lower premiums.  An HSA allows you to put aside tax sheltered funds into a separate medical savings account to help cover the costs of this reduced coverage.    

The problem comes if you have a major medical expense before you can build up a decent balance or if you have medical expenses which deplete your HSA and leave you exposed to new expenses.  There are limits to how much an worker can legally contribute, but more importantly afford to put aside into an HSA and the dollar amount for prescriptions, deductibles and co-pays can be significant.

To see how significant, please follow this link.  http://www.thehealthunderwriter.com/prod01_SHC.htm

Supplemental Health care Plans can be a relatively inexpensive way to manage these financial risks by covering part of or in some cases, even all of these expenses. 

The money is paid directly to you (unless you select otherwise) and you decide where to spend it.  This means that the cash you receive can reimburse you for expenses not covered by any major medical plan such as, groceries, utilities, car payments or any other of the expenses which continue whether you are laid by and accident or illness or not.