HSAs Continue to Make Inroads

May 1, 2008 (PLANSPONSOR.com) - More than 6.1 million Americans are covered by Health Savings Account (HSA)-eligible insurance plans, a 35% increase since last year, a new census released by America's Health Insurance Plans (AHIP) found.

The number of people with HSA/HDHP rose from 4.5 million in January 2007, and 3.2 million in January 2006, according to the survey, which noted that between January 2007 and January 2008, the fastest growing market for HSA/HDHP products was small-group coverage.

About a third (30%) of individuals covered by an HSA plan were in the small group market, 45% were in the large-group market, and the remaining 25% were in the individual market. The census did not include coverage associated with health reimbursement arrangements (HRAs), which are most commonly offered in the large-group market, according to the report.

Group Market

Overall, enrollment in HSA/HDHP coverage in the group market rose to over 4.6 million in January 2008 from roughly 3.4 million in January 2007. Over 1.8 million lives were enrolled in HSA/HDHP coverage in the small-group market and almost 2.8 million lives were covered in the large-group market. Moreover, HSA/HDHP products accounted for roughly a third (31%) of new coverage issued in the small group market.

Average deductibles for the best-selling HSA/HDHPs in the small-group market were lower than those in the individual market, averaging $2,244 for single coverage and $4,356 for family coverage, according to the report. Average annual out-of-pocket limits for the best-selling HSA/HDHP plans in this market were $3,462 for single coverage and $6,690 for family policies. The average lifetime maximum benefit (for companies imposing lifetime limits) for small-group policies was $3.9 million for single policies and $3.9 million per person for family policies.

Enrollment in the individual market rose to 1.5 million covered lives in January 2008, compared with approximately 1.1 million in January 2007. Nearly half (46%) of all individual market enrollees – including dependents covered under family plans – were aged 40 or older. Individual market consumers selected HSA/HDHP products for more than a quarter of their new purchases of health insurance.

In two market segments - individual and large-group - over 90% of enrollees in HSA/HDHP plans were in Preferred Provider Organization (PPO) products. Nearly as many - approximately 83% of enrollees in small-group HSA/HDHP plans - were in PPO plans.

Other Information on Health Savings Accounts (based on information from 460,000 - 800,000 HSAs accounts), included:

  • As of January 2008, 60% of HSA accounts had been in place for longer than one year, among companies reporting on accounts held by their members.
  • The average length of time accounts had been open was 16 months.
  • During the year 2007, 83% of the reported accounts in place had average annual balances of $2,500 or less; 7% had account balances over $5,000.
  • The average balance in HSA accounts in 2007 was approximately $1,380.
  • The average amount spent from HSA accounts in 2007 was approximately $1,080.

For this census, 97 health insurance companies reported coverage in HSA/HDHP products. Sixty-six (66) of these companies reported HSA/HDHP enrollment in the individual market; 88 companies had HSA/HDHP enrollment in the small-group market; and 89 companies had enrollment in the large-group market.

Fourteen (14) companies responding to the census had HSA/HDHP enrollment of more than 100,000 covered lives (including dependents) in January 2008. Thirty-seven (37) companies had HSA/HDHP enrollment of more than 25,000 people, and 62 companies reported HSA/HDHP enrollment of more than 5,000 people.

The survey is online at http://www.ahipresearch.org/pdfs/2008_HSA_Census.pdf