Health Savings Accounts increase 34 percent Last Year

Quarters - BSN

(Best Syndication News) - More people are opening Health Savings Accounts (HSAs) according to Bank of America. The increase was 34 percent more HSAs in 2011 compared to the previous year. Bank of America said that they added over 50,000 Health Savings Accounts in 2011.

Bank of America said that they have over 600,000 individual and over 2,000 corporations that have set up either a HSAs, a health reimbursement arrangement (HRAs), or flexible spending accounts (FSAs). Out of these health benefit options, the HSAs are increasing at the fastest rate. Almost 200,000 HSAs have been opened with balances of over $300 million.

Kevin Crain, head of Institutional Retirement and Benefit Services for Bank of America Merrill Lynch explained that the reason for the increase has been that the increasing cost of health care premiums that have pushed many companies to offer more consumer-driven health care plans to their offerings.

The HSA offers employees pre-tax contributions. All the money that is in the health savings account must go towards qualifying medical expenses such as prescriptions, or doctor visits. A person that has a individual HSA plan that is not part of a workplace plan can also deduct their contributions on their taxes. If the balance is not used, it can be rolled over yearly and the balance can grow so long as the medical expenses are not paid out. The account also earns tax-free interest. The HSA account moves with the employee and stays with them even when changing health plans.

The IRS increased the 2012 contribution limits for individuals and employees. In 2011, the limit was $3050, and in 2012 it is $3,100 for individuals. Employees with family coverage contributions increased from $6150 in 2011 up to $6,250 for family coverage. Bank of America said that on average the contribution to HSAs was $2,016 with employers contributing over 20 percent of the amount.

By: Dave Reddy

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