J.P. Morgan has exceeded more than one million health savings accounts, the largest pool in eight years, the firm said Wednesday.
They cited a number of factors—including health care reform, higher deductibles, rising health care costs and continued tax benefits—as reasons that have spurred HSA growth.
The average balance in 2012 for new HSA accounts also rose to its highest level in eight years growing 2 percent from 2011 to $1,009. And the average HSA balance in 2012 was $1,736, up 6 percent from 2011.
This week’s HSA report found that the average accountholder is saving approximately $500 in taxes annually (assuming a 28 percent federal income tax rate). Average balances are also increasing by about $500 per account per year an account is open.
The average account contribution in 2012 was $1,800 while the average distribution was $1,417, resulting in 71 percent of accountholders contributing more than they spent last year.
Overall, total investment program balances grew 31 percent in 2012, up more than 177 percent since 2009.
J.P. Morgan executives predict that health reform will continue to drive demand for HSAs across all segments of the market, which should continue into 2014. They also say that employers will take a much more active role in educating employees on the long-term value of these accounts.
A report from the Employee Benefits Institute, also out this week, found that participation in both HSAs and health reimbursement accounts is growing at a record pace. The accounts are a central element in consumer-driven health care and are designed to give individuals more control over funds allocated for health care services, thereby causing health plan participants to spend the money more responsibly.