According to a recent survey, health savings accounts continue to be adopted widely, with an ever-growing number of accounts and assets.
Between January 2008 and January 2009, participants in the latest HSA benchmarking survey from Celent reported a 46.1 percent increase in the number of HSAs. During the same period, survey participants saw their asset base grow by 62.6 percent.
According to Celent executives, HSAs should survive current efforts by Congress and the Obama administration to reform healthcare because they repesent one of the fastest-growing retail banking products.
Between January 2008 and January 2009, the survey reported, average account balances grew by only 13 percent, to $1,561. Officials attributed the low growth rate to a high number of unfunded accounts (accounts with no contributions during the preceding 12 months), which stood at 18 percent. This is due to a relatively high number of accounts coming online in January 2009, as well as a failure by some banks to purge inactive accounts.
Other key findings include:
- Investments fell of 5 percent of total assets, mostly likely due to the recessionary environment, unemployment and falling investment values. For larger HSA players, the number of accounts with investment balances barely registers; such accounts made up only 1 percent to 2 percent of all accounts.
- Specialist segment players are enjoying increased revenue per account, up to $84. This growth can be largely traced to improved management of DDA margins/spreads.
- In terms of distribution, the top 25 and specialist segments are moving to resemble each other. Top 25 players are gaining more sales through health plan channels, and specialists are building more business in the direct-to-employer channel.
- Debit cards are attached to almost all HSAs, but are only used for 66 percent of the funds disbursed. Checks continue to hold a good share (20 percent) of disbursements, while a new disbursement method, integrated payments, accounts for 1 percent of dollar volumes.
"HSA pricing continues to decline, with average collected monthly fees now hovering just above the $2 mark," said Red Gillen, a senior analyst with Celent's banking group and author of the report. "In fact, some HSA players are even preparing for the eventuality when HSAs go the way of checking accounts – in other words, free."