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Health savings accounts thrive in downturn

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By Jamie Burns

March 25, 2009 2:09 pm ET

Americans’ health savings account balances grew last year despite the economic decline.

Individual HSA balances increased 33%, and family HSA balances increased about 12% between the first quarter and fourth quarters of 2008, according to data from San Francisco-based Canopy Financial Inc.

The study also found that employees contributed to HSAs more than employers.

In the fourth quarter, employees contributed an average monthly payment of $206 for a family account, while employers contributed $133.

Individual accounts fared similarly; Employees contributed $111 on average, while employers contributed $69.

“What we've seen throughout 2008 is that consumers who select HSAs to manage their health care spending are not simply using these accounts to pay for their immediate health care needs,” Vik Kashyap, chief executive of Canopy Financial, said in a statement. “They are also funding their HSAs above and beyond their employer contributions and using them as long-term savings and investment vehicles.”

Canopy’s market research for last year also showed that average transfers into health investment accounts were twice and three times as high as transfers out of HIAs for individual and family accounts, respectively, each quarter.

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