Health Savings accounts have seen steady growth in enrollment since their inception in December, 2003 growing to over ten million in January 2010. With the passage of the Affordable Care Act, HSAs were impacted by some changes but maintained a foothold as HSA out-of-pocket costs serve as the benefit floor for health insurance exchange tiered plans.
Nationwide 6.6 million HSA accounts were held by bank custodians in January 2011 across over 600 custodians, the report finds. The total number of HSA enrollees though reached just over 10 million in January 2010, according to the AHIP Center for Policy and Research. Nationally a total of The CDMR study tabulates the 25 largest known HSA custodians who report their actual results, representing hundreds of branches and outlets. These banks alone held 4.6 million HSA accounts (70%), while the smaller bank outlets held an estimated 2.0 million HSA accounts.
Nationwide there were $11.3 billion in HSA assets as of January for all U.S. banks, the report finds. The total of HSA assets in the study alone was $8.0 billion in the 25 reporting banks, an increase of 32.7% in one year. The average asset balance per account in reporting banks was $1,735 in January. Some 17 U.S. banks now hold over $100 million each in HSA assets, and four hold over one billion each, according to Benefitblog.
Background
HSAs are tax-advantaged medical savings accounts available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP).The funds contributed to an account are not subject to federal income tax at the time of deposit. Unlike a flexible spending account (FSA), funds roll over and accumulate year to year if not spent. HSAs are owned by the individual, which differentiates them from company-owned Health Reimbursement Arrangements (HRA) that are an alternate tax-deductible source of funds paired with either HDHPs or standard health plans. HSA funds may currently be used to pay for qualified medical expenses at any time without federal tax liability or penalty.
HSAs were established as part of the Medicare Prescription Drug, Improvement, and Modernization Act which was signed into law by President George W. Bush on December 8, 2003. They were developed to replace the Medical Savings Account system.
Enrollment history
A survey of employers published by the Kaiser Family Foundation in September 2008 found that 8% of covered workers were enrolled in a consumer-driven health plan (including both HSAs and Health Reimbursement Accounts), up from 4% in 2006. The study found that roughly 10 percent of firms offered such plans to their workers. Large firms were more likely to offer a high-deductible plan (18%), but enrollment was higher in small firms (8% of covered workers, versus 4% in larger firms).
A survey of health insurers performed by America’s Health Insurance Plans (AHIP) found that 4.5 million Americans were covered by HSA-qualified health plans as of January 2007. Of those, 3.4 million were covered through employer sponsored plans, and 1.1 million were covered by individually purchased HSA-qualified plans. This represented an increase of 1.3 million since January 2006. In the individual market, 25% of new purchasers bought HSA-qualified plans. HSA-qualified plans represented 17% of new policies sold in the small group market and 8% of new policies sold in the large group market.
In January 2008, market research firm Celent moderated its earlier projections, citing the HSA market's "disappointing early showing", and projected 12.5 million accounts by 2012. This was projected by Celent. A survey published by AHIP in May 2009 found that 8 million people were covered by HSA/High-Deductible health plans in January 2009. Of those, 1.8 million were covered by individual policies and approximately 6.2 million were covered by a group plan.
Since the implementation of this law, health savings accounts have steadily increased. According to AHIP, enrollment hit one million by March 2005, 3.2 million by January 2006, 4.5 million in 2007, 6.1 million in 2008, and 8 million in 2009 and just over 10 million as of January 2010- a 25% increase in one year.
