The results of Canopy Financial’s Health Savings Account Market Report for the fourth quarter of 2008 indicates that the average HSA balance grew in 2008, despite the economic climate.
The company, whose HealthDirect and CareGain platforms serve as the core consumer-directed healthcare account management and administration backend for some of the largest banks and health plans in the country, collects and aggregates a wide range of statistics related to HSA use.
“What we’ve seen throughout 2008 is that consumers who select HSAs to manage their healthcare spending are not simply using these accounts to pay for their immediate healthcare needs. They are also funding their HSAs above and beyond their employer contributions and using them as long-term savings and investment vehicles,” said Vik Kashyap, chief executive officer of Canopy.
According to Canopy, HSA account balances grew in 2008 and employee contributions to HSAs significantly outpaced employer contributions. Moreover, there were two to three times as many transfers into health investment accounts as there were transfers out of HIAs throughout the year.
Key findings for 2008 include:
- Strong growth in HIA balances through the second quarter, followed by sharp declines in the wake of the U.S. financial crisis and market downturn.
- Average High Deductible Health Plan (HDHP) deductibles remained relatively flat .
- Card payments consistently lagged behind every other spending category, with the majority of spend out of HSAs derived from bill payments and reimbursements.
- Dental services, prescription medicine and hospital-related expenditures comprised the largest categories of consumer sub-deductible spending (ie. spending paid out-of-pocket, prior to an HDHP deductible being reached).