Bank of America's health savings account business rose 34 percent with the addition of 50,000 new accounts last year, the firm announced Monday.
The growth is attributed to increases in account use among employees of existing corporate clients as well as new relationships with individuals and employers. The firm's health savings accounts have more than $300 million in account balances among almost 200,000 total accounts.
Bank of America's tally of customers for its health benefits accounts include more than 2,000 corporations and more than 600,000 individuals. Other parts of that business also include health reimbursement arrangements and flexible spending accounts.
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"The use of HSAs is rapidly increasing, based in no small part on the rising cost of health care to employers and employees alike," says Kevin Crain, head of Institutional Retirement and Benefit Services for Bank of America Merrill Lynch. "We see more and more companies, including many of our corporate clients in the large and middle markets, adding consumer-driven health plans to their broader benefit offerings."
Annual contribution limits for HSAs, set by the IRS, rose slightly in 2012 for individuals and employees with single coverage, from $3,050 last year to now $3,100, and from $6,150 to $6,250 for employees with family coverage. The average contribution to Bank of America HSAs in 2011 was $2,016, with employers contributing more than 20 percent of this total average to their employees' accounts last year.
The average account balance has grown more than 10 percent in the last two years (now exceeding $1,600 per account), demonstrating that users are saving more in these accounts and also carrying balances forward year to year.s
"Future health care costs and funding retirement consistently rank among individuals' top financial concerns, with health and wealth becoming two sides of the same coin," says Justin Raniszeski, Health Benefit Solutions executive for Bank of America Merrill Lynch. "Approaching your financial life in this integrated fashion, and using multiple tax-advantaged saving vehicles in the workplace, can help chip away over time at what may seem like insurmountable savings needs."
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