Topics
More on Reimbursement

HRAs giving way to HSAs

Health savings accounts are growing more than ever, and possibly eating into health reimbursement accounts for the first time since researchers have been tracking the plans.

The number of Americans with HSAs, the tax-preferred accounts created in 2003 to pair with high-deductible health plans, grew from 6.6 million to 7.2 million between 2012 and 2013, while the number of HRAs fell from 5.1 million to 4.7 million, according to the Employee Benefit Research Institute's annual survey.

This is the first time the number of HRAs and the assets in them have fallen since EBRI started surveying the market in 2005, with HRA assets decreasing to $5.8 billion last year.

HSAs meanwhile have continued their growth, with assets increasing from $11.3 billion to $16.6 billion just in the course of 2012 to 2013.

Following the rise of high-deductible plans, HRA and HSA plans now cover some 26 million Americans spread out across about a quarter of employers with 10 to 500 workers and almost 40 percent of employers with 500 or more workers, representing about 15 percent of the commercial insurance market, according to EBRI.

The average combined HRA and HSA account balance increased to $2,010 in 2013, with HSAs participants having an average of $2,311 and HRA participants having an average of $1,236.

Average HSA balances have steadily grown over the past several years, from about $1,400 in 2008 to $2,311 last year, while average HRA balances have largely remained static, increasing from $1,130 in 2008 to $1,236 last year.

And even so, EBRI characterizes the account balances of those surveyed generally as low, "invested in
relatively safe vehicles such as money market funds."

The survey found that the amounts in rollovers have decreased, with the average rollover falling from $1,206 in 2012 to $1,165 in 2013 and the total falling from $9.8 billion to $9.2 billion, although
more people and employers are rolling over funds.

Last year, 90 percent of HSA and HRA account holders rolled over funds, up from 77 percent in 2006, according to the survey.

And another factor may end up swaying HSA and HRA trends in the coming years: the Internal Revenue Service's new policy letting FSAs rollover up to $500.