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High Deductible Plans Report Rapid Growth

Enrollment in high deductible health insurance plans linked to Health Savings Accounts (HSA) continues to surge, with the plans rapidly becoming a mainstream benefit plan offering. As of Jan. 1, 2008, 6.1 million people were enrolled in HSA – linked health insurance plans, a 35% increase over Jan. 1, 2007, according to an America’s Health Insurance Plans (AHIP) census released last week.

Enrollment in the plans shot up across all markets, according to AHIP, with the biggest percentage increase in the small-employer market. Employers with 50 or fewer employees had 1.8 million people in HSA-linked plans, roughly a 70% increase over the previous year. Enrollment also increased sharply in other markets. In the large-employer market, employers with at least 51 employees, enrollment in HSA-linked plans increaseD to 2.8 million, up about 35%, while enrollment in the individual market climbed to 1.5 million, also about a 35% increase. Enrollment has been growing “at a very consistent and strong pace,” said AHIP President and Chief Executive Officer Karen Ignagni in Washington.

Enrollment increases have been at such a high level that the plans no longer are niche products but are now a part of the mainstream health care benefit plan market, said Jeff Munn, a principle and consultant in the Falls Church, Va., office of Hewitt Associates Inc. HSAs, authorized under a 2003 federal law that added a prescription drug benefit to the Medicare program, first became available on Jan. 1, 2004, and had enrollment at 1 million in March 2005, 3.2 million as of Jan. 1, 2006, and 4.5 million as of Jan. 1, 2007.

AHIP said it believes its annual census covers virtually all people enrolled in health insurance plans linked to HSAs. A key reason for the big enrollment increase is that premiums for high deductible health insurance plans linked to HSAs are much lower where member cost-sharing is much less.

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HSA Contribution Limits

Please be aware of the 2016 annual HSA contribution limits listed below.

  • $3,350* - Maximum HSA Annual Contribution Limit (Self-only)
  • $6,650* - Maximum HSA Annual Contribution Limit (Family)
  • $1,000 - HSA Catch-up Contribution Limit
  • $1,300 - Minimum HDHP Annual Deductible (Self-only)
  • $2,600 - Minimum HDHP Annual Deductible (Family)
  • $6,450 - Maximum HDHP Annual Out-of-pocket (Self-only)
  • $12,900 - Maximum HDHP Annual Out-of-pocket (Family)
  • *For purposes of the full contribution rule an employee is treated as being eligible for the entire calendar year as long as he or she is eligible as of December 1 of that calendar year and continues eligibility throughout the following year. However, failure to maintain eligibility during the "testing period" will result in adverse tax consequences (including an additional excise tax). The testing period begins in December of the year in which the employee becomes eligible and ends the last day of December of the following year.

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