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Small Business Digest


President Bush Signs New HSA Regulations; Insured, Accounts, Savings To Rise Significantly

President Bush has signed into law new changes in Health Savings Account offerings that will significantly increase their popularity.

At the same time, Information Strategies, Inc. (ISI) issued its end of year forecast that HSA custodial accounts will reach 3.6 million by January 1, 2007 and double again in the next 12 months.

Total HSA insured will reach 8.7 million on January 1 and 18 million by this time next year.

HSA are a two-part offering involving a high deductible healthcare insurance policy with a tax-exempt savings accounts.  As long as disbursements are used for approved medical purposes, there are no federal taxes levied on them. 

Contributions are subtracted dollar-for-dollar on federal income tax forms.
According to JoAnn Laing, President & CEO of ISI, total savings at the end of this year will reach $5.1 billion and rise to more than $8 billion in the following 12 months.

Laing also reported that more than 1,000 banks and credit unions now offer HSA custodial accounts and double that number are gearing up to offer them in 2007.

Among the changes signed by the President were permission for the one time rollover of IRA, HRA or FSA monies into an HSA.  The maximum contributions were raised and the full amounts can be taken no matter what month the healthcare insurance is purchased. 

In many cases across the nation, premiums for HSA insurance offerings have been as much as 33% lower than comparative high deductible or PPO plans.  At the same time, individuals have been saving about half of this difference in their custodial accounts.

A small blot on the horizon for HSAs is the fact that some major insurance carriers seem to be increasing premiums for accounts renewed in the second and third year.
Laing said her company was standing by its projections for this year and next with strong expectations that they will be exceeded.

Total Insured

174 M

180 M

190 M

Total HSA Insured

8.7 M

18.0 M

28.5 M

Total HSA Custodial Accts

3.6 M

8.0 M

13.0 M

© 2018, Information Strategies, Inc.
P.O. Box 315, Ridgefield, NJ 07657