Health savings account balances rise in June

Health savings account balances and the number of HSAs jumped in June as employers leaned toward offering high-deductible health plans. Balances in HSAs — tax-advantaged medical savings accounts — grew to some $11.7 billion in total assets, reflecting a 31% increase from the same time last year, according to data from Devenir Group LLC. Meanwhile, the total number of HSA accounts grew to 6.3 million, up 28% from the same period. The average account balance also climbed to $1,845 in 2011, up from $1,640 at the end of 2010. Meanwhile investment assets in HSAs grew to an estimated $860 million in June, up 60% from a year ago, according to Devenir. The bulk of assets went into large-cap, international and fixed-income classes, the firm noted. Account assets are forecasted to reach $13.4 billion by the end of 2011 and to rise as high as $47.3 billion in 2015. Health care reform and the current recession are propelling interest in the accounts, said Eric Remjeske, president and co-founder of Devenir. The regulatory changes have prompted firms to consider using high-deductible health care plans. HSAs are typically used in conjunction with high-deductible plans to cover qualified medical costs without tax liabilities. “Companies started reviewing their health insurance as soon as they looked at the timeline for the health care reform,” Mr. Remjeske said. At the jumbo plan level, 50% of companies are using high-deductible health plans, he noted. The recession’s impact has led firms weigh whether to lay off people or slash employee benefits, which in turn led companies to consider high-deductible health plans.