From the March 2012 issue of Treasury & Risk magazine

Health Accounts Growing

Expansion suggests employees see accounts as way to save for retirement health costs.

Balances are expanding in the health savings accounts (HSAs) provided for employees who participate in consumer-driven health plans, suggesting HSAs may be gaining traction as a way to save for health expenses in retirement. HSA balances are still small, though, and a far cry from what people will need in retirement.

J.P. Morgan Treasury Services reports that in 2011, the average balance of the 900,000 HSAs that it administers grew 4%, to $1,547, and at year-end, 36% of accounts had balances of more than $1,000.

Elena Szymanski, executive director of J.P. Morgan Treasury Services, notes that 74% of account holders contributed more to their account than they paid out last year. “That indicates a trend toward being able to save and use this as a savings vehicle,” Szymanski says.

J.P. Morgan also offers HSA holders an investment line-up, similar to a 401(k) plan, and in 2011, investment accounts grew more than 25%.

An Employee Benefit Research Institute (EBRI) study of HSAs and health reimbursement arrangements—another type of account tied to consumer-driven health plans—found there were 8.4 million such accounts in 2011 with $12.4 billion in combined assets. The EBRI study shows 46% of the accounts contained more than $1,000 in 2011.


J.P. Morgan’s 2011 HSA Snapshot is available here. The Employee Benefits Research Institute report on health accounts can be found here.



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