Assets in health savings accounts (HSAs) and health reimbursement arrangements (HRAs), two relatively new health plan options, have grown in recent years, totaling $7.1 billion in 2009, up from $835.4 million three years earlier.
A recent study by the Employee Benefit Research Institute (EBRI) found that, in addition to the increase in assets, the number of accounts in these plans, known as consumer-driven health plans (CDHPs), also was up during the same period — totaling 5 million in 2009, up from 1.2 million in 2006.
The plans first became available in 2001, when a handful of plan sponsors offered health reimbursement arrangements, a type of health plan that reimburses workers for qualified medical expenses. In 2004, health savings accounts emerged, a type of tax-exempt trust or custodial account that an individual can use to pay for health care expenses.
Health reimbursement arrangements offer a tremendous amount of flexibility in plan design. Leftover funds at the end of each year can be carried over to the following year, and restrictions can be placed on the amount that can be carried over. With health savings accounts, any money left in the account at the end of the year automatically rolls over and is available the following year.
These plans covered 15 million to 19 million people in 2009, representing 9 to 11 percent of the privately insured market. As the number of people with account-based plans grows, total assets in these plans will grow as well, according to the study.
Other study highlights include:
- Account balances: Increases in average account balances appear to have leveled off. In 2006, account balances averaged $696. They increased to $1,320 in 2007, a 90 percent increase. Account balances averaged $1,356 in 2008 and $1,419 in 2009, 3 and 5 percent increases, respectively.
- Typical enrollee: The typical enrollee in consumer-driven health plans was more likely than traditional plan enrollees to be young, unmarried, higher-income, and educated, and to exhibit healthy behavior. No differences were found between CDHP enrollees and traditional plan enrollees with respect to gender, race, and presence of children.
- Rollovers: Overall, the number of people with a rollover, as well as the total level of assets being rolled over, have increased. The average rollover increased from $592 in 2006 to $1,295 in 2009.
- Account balance differences: Men tend to have higher account balances than women. Account balances also increase with household income, and education has a significant effect on account balances independent of income and other variables. No statistically significant differences in account balances were found by smoking, obesity, or the presence of chronic health conditions.
- Rollover amount differences: Men rolled over more money than women, whites have higher rollover amounts than minorities, and the youngest adults and oldest adults had the largest rollover amounts in 2009. Rollover amounts increase with household income and education, and individuals with single coverage rolled over a slightly higher amount than those with family coverage. There was no statistically significant difference in rollover amounts by health status, although individuals who smoke had higher rollover amounts than those who do not, and obese individuals had average lower amounts than non-obese individuals.