Written by Michael G. Kirwan, ChFC, CLU
Published Fall 2008 in the New Jersey Union County and Morris County Medical Societies’ Newsletters
As most of our readers are aware, we have been one of the most vocal advocates of HSA’s (Health Savings Accounts) since their inception as MSA’s (Medical Savings Accounts) in 1997.
According to the recent Census prepared by AHIP, interest and participation in HSA’s has exploded in the past three years. Here are the results of their Census regarding the number of people with HSA/HDHP’s:
|March 2005||1.0 million||N/A|
|January 2006||3.2 million||307%|
|January 2007||4.5 million||40%|
|January 2008||6.1 million||35.5%|
In just the last two short years, the expanded interest in HSA’s represents an increase of nearly 91%, with the fastest growing market between January 2007 to January of 2008 coming from the Small Group Market (under 50 employees).
The Census indicates that these dramatic increases do not include any HSA/HDHP’s for which the company/practice or participant did not open a corresponding Tax Deductible HSA(IRA) Account, as this is the only real way that the Federal Government can count the number of HSA’s in existence. There are any number of HSA Health Insurance Plans, that are being used as catastrophic coverage, for which the participants have never opened an HSA(IRA) Account, that are excluded from the aforementioned Census.
Age demographics appeared to be equally spread with 46% age 40 or over and 54% under the age of 40.
During the year 2007, 83% of those reporting HSA(IRA) Accounts, had an average balance of $2,500 or less with 7% having balances of approximately $5,000.
Having specialized in the medical market since the early 70’s and specifically with the HSA since 1997, our clients are avid savers of not only the significant premium savings that they enjoy but Tax Deductible” contributions they make yearly to their HSA(IRA) Accounts. By contrast, our clients average balance is in excess of $20,000, with 70% of our clients having balances in excess of $5,000 and some as much as $75,000.
As a result of strong demand, we have recently concluded the formation of a partnership with one of the largest Clearing Houses in America, along with our Money Manager to provide Advisory Management on a non-commissionable trading platform that will allow our clients to enjoy the ability to purchase stocks, bonds, ETF’s, index and mutual funds on an open platform. They will also receive quarterly/monthly performance reports that will keep them on track with their investment portfolio, all for a nominal yearly fee.
If you would like a copy of the AHIP Report or would like to learn more about how your practice might benefit from having your own HSA or, if you already have an HSA but might be looking for an investment alternative, please contact us.