Benefits May 5, 2005

Insurance Trade Group: Number of HSA-Eligible Policies Growing Rapidly

May 5, 2005 (PLANSPONSOR.com) - An insurance industry trade group announced that the number of Americans getting health coverage through high deductible plans offered along with health savings accounts (HSA) has now topped more than one million.
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Data releasedon the Web by America’s Health Insurance Plans, a Washington, DC trade group representing health insurance providers, showed there were now 1,031,000 Americans covered by HSA-eligible policies – up from 438,000 in September 2004. Much of that growth came from workplace health policies linked with HSAs, the organization said.

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“HSAs are steadily gaining momentum in the marketplace,” said AHIP president and CEO Karen Ignagni, in a statement. “HSA-eligible policies now fill an important niche for employers and individual purchasers and America’s health insurance plans continue to make them a valuable part of the suite of products they offer.”

According to the group’s data:

  • previously uninsured people purchased 37% of the individual policies
  • 27% of the policies in the small group market have been sold to employers who did not previously offer coverage to their employees
  • nearly half of people covered by HSA-eligible insurance are over the age of 40
  • there are now 71 health insurers offering high deductible plans to large employers, compared with 15 in September; 68 insurance companies providing plans to small employers, up from 20 at the time of the earlier report; and 56 companies have HSA-eligible plans for individuals, contrasted with 11 six months ago.

Ignagni said HSAs are becoming a viable option for many uninsured Americans. However, others disagree. In April, the Commonwealth Fund said considerably fewer than 1 million of the nation’s 45 million uninsured will likely get health care coverage from HSAs (See Report Paints Gloomy Picture Of HSA Effects ). Commonwealth claimed that HSA enrollment likely will be drawn from those already with coverage.

The latest data was based on responses from 99 AHIP member companies.

An HSA is an account to which employers and individuals can contribute pre-tax dollars for future medical expenses. The accounts belong to the individuals, and unused contributions can roll over from year to year. Congress created the tax-preferred accounts in late 2003 as part of the Medicare drug legislation. The law requires qualifying high deductible health insurance plans to accompany health savings accounts.

AHIP’s new Web site, HSADecisions.org , provides information on companies that offer HSA-eligible health insurance plans, including a state-by-state locator. The site also features a HSA learning center, cosponsored by the US Small Business Administration.

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