Employee HSA Enrollment Rate Led By Large Employers

April 2, 2007 (PLANSPONSOR.com) - Participant enrollment in health savings accounts (HSAs) that are linked to high-deductible health plans (HDHPs) increased in both the individual and group markets, with the number of people covered by these products increasing by 43% since last year, according to a recent survey by the trade group America's Health Insurance Plans (AHIP).

The greatest increase in enrollment was in the large-group market, according to a press release on the survey , which said HSA enrollment at large companies grew at three times the rate of small employers. As of January 2007, two million employees were enrolled in HSAs, up from 679,000 a year earlier and 162,000 in March 2005.

While not as high as for large employers, the growth of the number of employees of small companies enrolled in HSAs was significant, the release said, reaching 1.1 million in January from 510,000 the year before. However, the overall growth rate of enrollment in HSAs linked to HDHPs was tempered by the individual market, where enrollment only increased 29% over last year, with enrolled employees totaling 1.1 million.

Though the AHIP survey makes the growth in HSA enrollment seem impressive, a study last December by the Center for Studying Health System Change found much of that growth is attributable to employees not having any other choice (See Total Benefits: HSA Sway ).

Other findings of the AHIP survey include:

  • In two market segments – individual and large-group – over 90% of enrollees in HSA/HDHPs were in PPO (preferred provider organization) products.
  • Approximately 85% of enrollees in small-group HSA/HDHPs were in PPO plans.
  • The average annual premium for large employers for family coverage in was $6,963 in January, while single coverage averaged $2,796.
  • Annual deductibles in the large-group market averaged $3,996 for families and $1,952 for individuals.
  • 86% percent of HSA/HDHP enrollees had average annual balances of $2,500 or less at year-end 2006, while 4% had average annual balances exceeding $5,000.
  • More than 90% of employers included in the survey offer HSA plan options with preventive benefits that are covered outside of the deductibles.