Benefits March 21, 2011

Most Fidelity HSA Participants Nearly Spend Down their Accounts

March 21, 2011 (PLANSPONSOR.com) – Thirty-six percent of Health Savings Account (HSA) participants at Fidelity Investments use more than 90% of their annual HSA contribution on qualified medical expense reimbursements.
Reported by

A news release said 40% of the HSA participants use between 10% and 90% of their HSA contributions and carry over the rest, while 24% of participants use less than 10% of their annual contributions and investing the balances for future health expenses.

Fidelity’s analysis of the HSA accounts it administers was released with word that the Boston-based Fidelity’s HSA business increased by 52% in 2010 with 14 new clients in the last year, according to the news release. Fidelity implemented 14 new employers in 2010 and also added 22,000 new individual HSA accounts in 2010 for a total of 74,000 accounts.

Ninety-five percent of participants carry over some balance from year to year, effectively turning the accounts into longer-term, tax-free retirement health care savings vehicles, Fidelity said. On average, HSA participants had contributions of $2,620 made to their accounts in 2010 including their own contributions and employer contributions.

Approximately one out of five (17%) participants contributed, both their own and employer contributions, more than $5,000 to their account in 2010, and nearly half (46%) had contributions of $2,500 or more in 2010. The maximum contribution permitted by law in 2011 is $3,050 for individuals and $6,150 for families.

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