« Can a Health Savings Account Help Your Business? | Main | Health Savings Accounts Create Opportunities For Banks »
October 07, 2009
Health Savings Account Balances Increasing
According to data collected by Canopy Financial Inc, a provider of health care banking technology solutions, balances in Health Savings Accounts increased slightly in the first quarter compared to fourth quarter levels in 2008.
The average balance in a family Health Savings Account grew by 7% to $1,720 during the first quarter, while the average balance in an individual Health Savings Account rose 3% to $960.
And compared to the year earlier period, Health Savings Account balances also grew. The average family Health Savings Account balance was $1,419, and the average individual Health Savings Account balance was $697 during first quarter of 2008.
Contributions to Health Savings Accounts have also climbed for both employers and employees.
During the fourth quarter, the average monthly employer contribution was $69 and $133, respectively, for individuals and families. In the first quarter, that increased to $113 for individual Health Savings Accounts and $266 for family Health Savings Accounts.
Similarly, employees are also placing more money into their Health Savings Accounts.
Average contributions for an individual HSA were $111 for individuals and $206 for families in the fourth quarter of 2008. That rose slightly to $116 for individuals and $239 for families during the first quarter.
Steady contributions from employers and employees kept Health Savings Account balances growing amid the recession in the first quarter, noted Vik Kashyap, chief executive of Canopy Financial. “A high percentage of the employers that offer these accounts are contributing into the HSA,” he noted. “They fix the contribution on a monthly basis, so that it’s made irrespective of how the economy is doing.” Interestingly, while employees likely felt the squeeze on their dollars during the first quarter, they were fine with chipping into their Health Savings Accounts, he added.
“You’d expect people to not be contributing, but there’s a tax advantage here,” Mr. Kashyap noted
Health Savings Account holders also increased the amount of money that they transferred to investments.
In the first quarter, Health Savings Account holders transferred an average of $1,372 to investments from individual Health Savings Accounts and $2,633 from family accounts, compared with $1,167 for individual accounts and $1,978 from family Health Savings Accounts in the fourth quarter.
Amounts of money transferred into Health Savings Accounts from investments also rose, with an average of $722 transferred in from investments for individual accounts, up from $540 in the fourth quarter.
Meanwhile, on the family side, the amount transferred from investments dropped, falling to $1,157, from $1,556 in the fourth quarter.
Posted by Wiley Long at October 7, 2009 09:17 AM