HSA Coverage Use Grows — But Only at Large Employer Groups

The typical people now eligible to set up health savings accounts (HSAs) may now be enrollees in large-group health plans.

The number of people with HSA-compatible individual policies or HSA-compatible small-group coverage appears to be falling sharply.

Analysts at America’s Health Insurance Plans (AHIP) have published data supporting the possibility of a dramatic HSA eligibility in a new batch of  health insurance issuer survey results. AHIP received responses from 52 of the 93 issuers. The issuers that participate appear to account for more than 90% of enrollment in HSA-compatible health coverage.

In 2017:

• The total number of U.S. residents with HSA-compatible coverage increased 7.8% between 2016 and 2017, to 22 million, according to America’s Health Insurance Plans (AHIP).
• The rate of increase was up from 2.8% between 2015 and 2016.
• Large-group plan enrollees accounted for 82% of the HSA-compatible coverage enrollees in 2017, up from 78% in 2016.
• Only 7% of the HSA-compatible coverage enrollees had individual major medical coverage, down from 11% in 2016, and down from 64% in 2005, when the HSA program came to life.

(Related: Growth in HSA Plan Enrollment Slows)

One problem with interpreting the data is that AHIP cannot be sure about what really happened at the dozens of issuers that declined to participate.

Another problem is that many issuers were unable to tell AHIP how many of their HSA-compatible enrollees had individual, small-group or large-group coverage. The number of HSA-compatible coverage enrollees with no available coverage type information increased to 6.1 million for 2017, from 2.3 million for 2016.

But the AHIP survey results suggest the raw number of people with HSA-compatible individual coverage may have fallen to 1.1 million in January 2017, from 1.9 million people in January 2016. If the new number is correct, the number of holders of HSA-compatible individual coverage may have sunk to the lowest level since 2006.

Similarly, the reported number of holders of HSA-compatible small-group coverage fell to 1.8 million, from 2.1 million a year earlier. The 2017 figure for use of small-group HSA-compatible coverage is the lowest that AHIP has recorded since 2008.