WASHINGTON — A report from the Government Accountability Office finds that 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 GAO said national surveys indicate that more than four out of 10 people who purchased high-deductible plans don't open a health savings account, even though they were eligible to do so. Participants said they lacked information about the accounts, they could not afford them, or they did not believe they needed them.
Despite the growth, from 438,000 in 2004 to approximately 4.5 million individuals covered by HSA-eligible plans in 2007, they 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.
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In addition, 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 adjusted gross income 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.
The report also found that the total value of all HSA contributions reported to the IRS in 2005 was about twice that of withdrawals–$754 million compared with $366 million. Among all filers reporting HSA activity in 2005, average contributions were about $2,100, compared to average withdrawals of about $1,000. Survey estimates of the contributions employers made to employees' HSAs in 2007 varied. One employer survey reported average contributions for single coverage of $626 among large employers, while another employer survey reported average contributions for single coverage of $806 among small and large employers. More than a third of surveyed employers that offered HSA-eligible plans made no HSA contributions. Here is a look at some other report findings:
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