Consumers using, but confused about, health savings accounts, surveys find

Nearly 17.4 million Americans participate in health savings account-eligible insurance plans, a decade after Congress authorized the creation of health savings accounts, according to results of a census released this week by industry trade group America's Health Insurance Plans.

That's an increase of nearly 12% since 2013, when 15.5 million people had high-deductible health plans paired with a health savings account, though the number of plans has grown steadily since they were first implemented. In 2005, one year after the plans went into effect, just slightly more than 1 million people were enrolled in HSA-qualified plans.

In the past year, most of the enrollment growth has come in the large group market, AHIP reported. Between January 2012 and January 2013, that market's representation in HSA/HDHPs jumped from 59% to 68%, and then it rose to 74% of all eligible plans by January 2014.

That translates into 12.8 million people in the large group market covered by a high-deductible health savings account plan, with 2.5 million in the small group market and 2.0 in the individual market.

The latest data comes from a survey e-mailed to 112 health insurance companies and their subsidiaries in January 2014; 80 responded.

“HSA plans are increasingly becoming an important and valuable coverage option for consumers and employers,” AHIP President and CEO Karen Ignagni said in a release. “HSA plans provide important tools to support consumers and families in their healthcare decisions and to help them save for future medical expenses.”

And according to data collected by AHIP, along with the American Bankers Association's HSA Council, people are making use of the tax-advantaged accounts to cover healthcare expenses and save for future costs. In a joint survey released Thursday, the organizations found that more than half of HSA account holders spent at least 80% of their HSA funds to pay for medical expenses during 2012. And about 81% of the 1.4 million HSAs measured ended the year with a positive balance that could be carried over to the next year.

The Employee Benefit Research Institute last month reported that, among HSAs with claims, the average distribution was $1,953. And for the average HSA, the year-end balance for 2013 was $1,766, up from $1,280 at the beginning of the year.

“This study confirms that HSAs are being used as they were designed: to pay for routine healthcare needs and to save towards future medical expenses,” Kevin McKechnie, executive director of the American Bankers Association's HSA Council, said in the release.

But a recent survey concerning consumer and employer healthcare benefits, conducted by Alegeus Technologies, suggests that the public's proficiency with health savings accounts still remains low, even more than 10 years after the Medicare Prescription Drug, Improvement and Modernization Act of 2003 led to the creation of health savings accounts. In an online survey of 1,005 customers, Alegeus found that 26% didn't know that HSA funds could be carried over beyond the immediate plan year. Just 30% of those questioned passed a basic HSA proficiency quiz, the firm reported.

“Results point to a significant consumer education gap and a need for enhanced decision-support resources to help consumers better manage their ever-growing responsibility for healthcare purchase and funding,” Alegeus said in a release.

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