Preliminary results from reporting banks show a significant increase in Health Savings Account (HSAs) deposits as companies begin the new year.
This newsletter's parent, Information Strategies, Inc (ISI),. reports preliminary analysis based on reports from industry stakeholders suggests the rate of increase will surpass 2009 numbers.
Driving the growth is the significant increase in companies offering HSAs, which will bump up to nearly 40% of all firms offering healthcare insurance to their employees.
Another trend, first noted last year by ISI, is the increase in funds deposited during the first months of a new HSA. This average, which ISI computed at $919 in 2009 is just over a thousand dollars at $1003 on average.
While average balances at the end of the year continue to hover just over $1900 for all accounts, those accounts opened more than one year now average $2,450 based on its analysis. This figure is up substantially from prior years as the real savings from HSAs are now starting to kick in.
Respondents to ISI's continuing polling of healthcare insurance users continues to surface satisfaction with HSAs. Fully four in five respondents said they would recommend HSAs to family and friends. This compares with the 52% positive response to more traditional plans.
Insurance agents reported that they now include HSA offerings in 71% of first proposals given to business customers. In 2007, this figure was less thasn 20%.
As reported by Consumer Driven Market Report, Webster Bank is indicating strong HSA sales in the fourth quarter in what is expected to be a good year for banks in the HSA market. HSABank, the fourth-largest HSA custodian, saw deposit share grow 26% last year to $668 million in HSA deposits and accounts climbed 16% to more than 260,000. HSABank continues on a roll so far in January, traditionally its strongest month, as deposit growth has outpaced January of '09 rising nearly $60 million to $727 million, and the bank has opened 40,000 new accounts this month.
Driving growth last year and into 2010 is a continued secular shift by large and mid-sized employers into HSAs, either as standalone plans or as part of a package of offerings. This is not limited to private firms: the adoption by government workers and their plans has skyrocketed. Other factors driving market share are very strong consumer support for the concept of saving for future medical expenses; and employer average contributions to HSAs rising slightly with a majority of employers contributing.