The results of Devenir’s 2013 HSA survey are in, and the news, which shouldn’t be a surprise to anyone, is that HSAs are growing. The consulting firm, which surveys the top 50 HSA administrators for its semi-annual survey, says that “HSAs grew to an estimated $19.3 billion in assets and 10.7 million accounts at year-end 2013 and have grown to more than $20 billion in assets during January,” as reported by BenefitsPro.com.
In fact, according to the article, HSA assets increased 25 percent and total accounts increased 30 percent in 2013 alone. That’s a huge growth rate, one that is no doubt influenced by the health reform legislation.
Instead of driving prices down, as we were promised, the Affordable Care Act has actually resulted in price increases for a lot of individuals and employers, so people are examining their options and, in many cases, opting for these lower-cost, account-based plan designs.
A rule change created by the ACA will likely encourage HSA adoption in 2014 as well. Starting this year, the maximum out-of-pocket on all plans, including traditional copay plans, will be tied to the HSA-compatible High Deductible Health Plan out-of-pocket limit, which is $6,350 for single coverage and $12,700 for family coverage. All in-network expenses count toward these limits, including copayments. Since this is an increase in benefits for many traditional PPO plans, that should create a bigger price separation between PPO and HSA plan designs, making HSA plans even more attractive.
Additionally, employers who decide to drop their group health plan, as many are doing in 2014, can continue to put money in their employees’ HSAs as long as they have coverage under a compatible plan either through a spouse or in the individual market. These employer contributions are tax-deductible to the employer as a business expense and are received tax free by the employees.
To read an executive summary and download the full report from Devinir, click here.