HR Administration

Health Savings Account Enrollment Surges 18 Percent

By Jerry Geisel

May. 30, 2012

Enrollment in health savings accounts linked to high-deductible health insurance plans leaped more than 18 percent to 13.5 million as of Jan. 1, according to an annual census released May 30.

HSA enrollment rose in the large and small group markets as well as the individual markets, according to the survey by the Washington-based America’s Health Insurance Plans.

The large-employer market registered the largest percentage gain over the previous year. Employers with at least 51 employees had 7.9 million people in HSA-linked plans at the start of the year, a 25 percent increase from the previous year.

Enrollment growth in the small group and individual markets increased more modestly.

In the small group market, enrollment climbed to just over 3 million, an increase of nearly 9 percent, while individual market enrollment rose to nearly 2.5 million, an increase of almost 5 percent.

“Millions of individuals, families and employers have chosen an HSA plan for the affordable, high-quality coverage these plans provide,” AHIP President and CEO Karen Ignagni said in a statement.

HSAs, authorized under a 2003 law that added a prescription drug benefit to the Medicare program, became available on Jan. 1, 2004, and enrollment has risen steadily since then. AHIP said 1 million people were enrolled in HSAs in 2005, 3.2 million in 2006, 4.5 million in 2007, 6.1 million in 2008, 8 million in 2009, 10 million in 2010 and 11.4 million in 2011.

States with the highest percentage of HSA enrollees younger than 65 with private health insurance were:

• Vermont, 19.9 percent

• Minnesota, 14.3 percent

• Montana, 12.1 percent

States with the lowest percentage were:

• Hawaii, 0.3 percent

• Alabama, 1.3 percent

• Mississippi, 1.6 percent

The key factor driving HSA growth is that premiums for high-deductible health insurance plans, which the law requires be linked to HSAs, tend to be lower than more traditional health plans, according to numerous surveys.

For example, a survey last year by Mercer L.L.C. found that the cost of medical coverage through a CDHP linked to an HSA averaged $7,787 per employee in 2011. That’s about 20 percent less than the average of $9,385 per employee for medical coverage through a preferred provider organization.

This year, the minimum deductible for single coverage through an HSA-linked health plan is $1,200. The minimum deductible for family coverage is $2,400.

AHIP’s 2012 HSA census is based on 97 insurers and their subsidiaries offering HSA-linked health insurance plans.

Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.

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Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management.

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