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February 2017  Volume 15, Number 2        

Balances in Health Savings Accounts Grow by a Third

Balances in Health Savings Accounts grew by more than a third in 2015, according to a new report by the Employee Benefit Research Institute

At the end of 2015, the average HSA balance was $1,844, up from $1,332 at the beginning of the year. Average account balances increased with the age of the owner of the account. Account balances averaged $759 for owners under age 25 and $3,623 for owners ages 65 and older.

“Nearly 30 percent of employers offered an HSA-eligible health plan in 2015, and that percentage is expected to increase in the future both as a health plan option and as the only health plan option,” Paul Fronstin, director of EBRI’s Health Education and Research Program and author of the study, said in a statement.

A health savings account is a tax-exempt trust or custodial account that is funded with contributions and assets that an individual can use to pay for health care expenses. Individuals can contribute to an HSA only if they are enrolled in an HSA-eligible health plan. Contributions to the account are deductible from taxable income, an employer’s contributions to the account are excludable from the employee’s gross income, and distributions for qualified medical expenses from the HSA are excluded from taxable income to the employee. Tax-free distributions are also allowed for certain premium payments. Any interest or other capital earnings on assets in the account build up tax free.

The authors found enrollment in HSA-eligible health plans is now estimated to be between 20-22 million policyholders and their dependents.

The report found more than four in five HSAs (85 percent) were opened since the beginning of 2011. About 3 percent of HSAs had invested assets beyond cash. A total of 36 percent of HSAs with invested assets ended 2015 with a balance of $10,000 or more, whereas only 4 percent of HSAs without invested assets had such a balance.

Among HSAs with investments, accounts opened in 2015 ended the year with an average balance of $4,907 whereas those opened in 2005 had an average balance of $27,903 at the end of 2015.

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In this issue:

This Just In...

Bosses’ Top Concern is the Employer Mandate

3 Tips to Expand Voluntary Benefits and Save Money

Government Cracks Down on Parity of Coverage Violators

Balances in Health Savings Accounts Grow by a Third



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