By Cyril Tuohy
Fidelity Investments said the number of employers offering a Fidelity health savings account (HSA) rose 34 percent to 137 companies in 2014 compared with the previous year.
Fidelity also said it is the fourth straight year of double-digit client growth in the HSA arena.
“Clients are asking us to help their employees save for rising health care costs today and in retirement, and an HSA can go a long way toward meeting that goal,” Eric Dowley, senior vice president of HSA product management at Fidelity, said in a statement.
The Fidelity data are limited to the number of companies signing up for Fidelity HSAs, but still provide a snapshot of employer behavior not necessarily captured in broader consumer HSA surveys. The data also provide an indication of the inroads HSAs have made with employers.
Fidelity said the most recent employers to sign up for its HSA program were Bristol-Myers Squibb, the pharmaceutical giant; TriMas Corporation, a manufacturer of engineered and applied products; UL, a safety science company, and Bowdoin College, a liberal arts and sciences institution.
The fund manager also said it managed $1 billion in HSA assets in 2014, an increase of 54 percent over the previous year.
HSAs have become popular over the last several years, with some health care finance experts drawing parallels with 401(k) accounts used to finance retirement. Like 401(k)s in the retirement industry, HSAs represent the health care financing industry’s move to a defined contribution model.
Devenir Research, which tracks the HSA industry, said the number of HSAs grew to 13.8 million accounts at the end of 2014, an increase of 29 percent over the 2013.
Assets held in HSA accounts grew to $24.2 billion at the end of last year, an increase of 25 percent, according to the 2014 Year-End Devenir Research HSA Research Report.
Many HSAs, often paired with high-deductible health plans, come with investment options that allow accountholders to earn interest and use earnings or distributions to pay for qualified medical expenses.
The maximum contribution into an HSA for 2015 is $3,350 for an individual and $6,650 for a family, and many companies now offer an employer contribution. The contributions are tax deductible from gross income.
As insurance carriers continue to shift the burden of paying for health care expenses onto workers and families by raising deductibles and copays, experts say HSA accounts will continue to grow.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
© Entire contents copyright 2015 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.