HSA account balances on the rise
■ More people are opting for the savings accounts, while individual balances also increase.
By Victoria Stagg Elliott — Posted Sept. 3, 2009
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The amount of money in health savings accounts is going up after decreasing through the second half of last year, according to report issued Aug. 11 by Canopy Financial.
The company provides technology platforms for consumer-directed health plans, and the analysis includes accounts the company handles, even those that are unfunded. The report did not delve into the exact reasons, but company officials suspect the phenomenon is, in part, a result of more companies and patients recognizing the value in tax-free set-asides for health care costs.
"Despite the recessionary environment, contributions into health savings accounts have not been waning and continue to be made because of the tax advantages," said Vik Kashyap, Canopy's CEO.
The report, which included data on the first quarter of 2009, found that the average balance in an individual HSA was $960 by the end of March. This was 3% higher than the $928 held at the end of December 2008. The average amount in March 2008 in individual accounts was $697.
An average of about $1,720 was in family accounts, 7% higher than the $1,600 there in December 2008. Family accounts held $1,419 as of March 2008. The value of family and individual accounts grew through the first half of 2008 but started to decline in June 2008.
These accounts have been growing in popularity, and the American Medical Association supports them as one part of achieving universal medical care access and coverage while still allowing patients choices about their health insurance.
According to a census issued May 13 by America's Health Insurance Plans, 8 million people were covered by a health savings account eligible insurance plan. This represented a 31% increase from the 6.1 million enrolled in 2008.
The Canopy report found that as of March about 44% of employers contributed to individual and family HSAs. In those companies, 54% of employees contributed to individual accounts, and 63% gave to family ones.
The average monthly employer contribution in March 2008 to family and individual accounts was $68. The average employee contribution was $58. Numbers separating out family and individual accounts for this time period are not available, but these numbers increased to an average monthly employer contribution of $113 to an individual account and $266 to a family account as of March 2009. Employee contributions were $116 and $239, respectively.
Individuals spent an average of $89 monthly as of March 2008 but this number went down to $81 as of March 2009. Families spent $127 monthly as of March 2008; this declined to $103 in the most recent report.