Health Savings Accounts: Participation Increased and Was More Common among Individuals with Higher Incomes

Source: U.S. Governmental Accountability Office

The number of individuals participating in HSA-eligible health plans and HSAs increased significantly between 2004 and 2007; however, in all years, many HSA-eligible plan enrollees did not open an HSA. The number of individuals covered by HSA-eligible plans increased significantly between September 2004 and January 2007–from about 438,000 to approximately 4.5 million, according to industry estimates. Despite the growth, these plans represented a small share of individuals with private health coverage–about 2 percent in 2006. The number of tax filers reporting HSA activity also increased, nearly tripling between 2004 and 2005, from about 120,000 to about 355,000. Industry estimates suggest continued growth in HSA participation in 2006 and 2007. Despite the growth in HSA participation, nationally representative survey estimates from 2005, 2006, and 2007 found that more than 40 percent of HSA-eligible health plan enrollees did not open an HSA.

Tax filers who reported HSA activity in 2005 had higher incomes on average than other tax filers. Among tax filers between the ages of 19 and 64, the average AGI for filers reporting HSA activity was about $139,000 compared with about $57,000 for all other filers. The income differences existed across all age groups.

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