HSAs Surge in Popularity

Data from America’s Health Insurance Plans also revealed that the states with the highest level of Health Savings Accounts and high deductible health plans are Illinois (with 903,000 enrollees); Texas (with 889,364 enrollees); California (with 808,019 enrollees); and Michigan (with 577,208 enrollees).

The census report also revealed that the majority of those individuals that are enrolled in an HSA plan have access to a wide variety of tools and resources to help them manage the plan, including information for selecting appropriate providers and hospitals.

“HSA plans provide quality care coverage and are meeting the needs of different ages, health statuses and socioeconomic backgrounds,” Krusing said “They particularly plan a vital role in providing healthcare to millions of Americans who might otherwise be uninsured. In the initial years following the authorization of HSA plans, a report found that 27% of those buying HSA plans in the individual market previously did not have health insurance.” 

The Devenir Health Savings Accounts survey

Meanwhile, the semi-annual survey on Health Savings Accounts by Devenir finds that contributions to the plans continue to rise. “We saw pretty consistent contributions to these accounts even during the rough economic period,  but the movement has really taken off recently,” Rob said.

Devenir’s survey data was collected in July 2013 from approximately 50 providers in the Health Savings Accounts market. Key findings from the study reveal that:

• The total number of accounts rose to more than 9.1 million, with assets totaling $18.1 billion. This represented a 29% increase from one year ago;
• The average account balance halfway through 2013 grew to $1,981 from $1,879 from the same time last year, a 5% increase;
• The average investment account holder (a deposit and investment account) has a $10,484 account balance;
• Total contributions to HSA accounts reached $16.7 billion, with accountholders retaining approximately 23% of those contributions; and
• Total HSA investment assets reached an estimated $2 billion in June, up 14% from the end of 2012, and up 26% from one year ago.

Looking ahead, Devenir President Eric Remjeska sees the increased adoption of Health Savings Accounts continuing. He says that as long as one has a high deductible health insurance plan, HSAs offer a great way to set aside money for healthcare in a tax-deferred manner.

“It’s a triple tax free benefit,” Remjeska said. Also, “the advantages from a usage standpoint are that, typically, the accounts have a lot of typical savings and investment account type features to them. Typically they’re accessed online; typically they come with a debit or credit card; typically they have bill pay functionality with them; and typically then have some sort of investment vehicle associated with them.”

The obvious disadvantage is that to qualify you must have a high deductible health insurance plan to begin with. “Otherwise, they do act and function much like a typical checking or savings account, with the investment component added in,” he said.