HSA-Based Plans Continue Growth, Despite Pullback in Employer Funding


Despite a reduction in the number of employers willing to contribute their own funds to employees health-savings accounts, HSA-High-Deductible Health Plan combinations are gaining market share in the group health insurance industry.

That’s the latest research from the 2013 EBRI/Greenwald & Associates Consumer Engagement in Health Care Survey, recently published by the Employee Benefit Research Institute.

According to the study, the number of health reimbursement accounts – a form of group health insurance in which the employer contributes to a health savings plan on the workers behalf, actually fell substantially from 5.1 million in 2012 to 4.7 million in 2013. At the same time, the number of people with HSAs increased from 6.6 million to 7.2 million.

Total assets within HRAs fell to $5.8 billion, but assets in health savings accounts rose from 11.3 billion to 16.6 billion.

The numbers reflect an overall trend in the health care cost burden, that is being increasingly borne by workers rather than employers.

“Both HSAs and HRAs have been around long enough now that a growing percentage of the population has held them for a number of years. Together, they covered about 26 million people in 2013, representing about 15 percent of the privately insured market,” said Paul Fronstin, director of EBRI’s Health Research and Education program, and author of the report. “But the two types of plans appear to be taking different directions.”

The report also found that assets within these accounts are invested conservatively in highly liquid investments like money markets and cash and cash equivalents. However, Fronstin anticipates that as account balances grow, there will be more and more interest in riskier asset classes with potentially higher expected returns, such as stocks, bonds and mutual funds.

In addition, the report also found that the total assets invested in HSAs and HRAs combined were on the increase, as were account balances. The average account balance in a health savings account was $2,311 last year – markedly higher than the average $1,236 average balance in health reimbursement accounts.

The full report, Health Savings Accounts and Health Reimbursement Arrangements: Assets, Account Balances, and Rollovers, 2006-2013, is available at www.ebri.org