U.S. House Speaker Hastert Joins Business Leaders to Review Latest Data on Success of Health Savings Accounts - Data Shows HSAs Are An Attractive Option for Broad Range of Americans

CHICAGO -- June 21, 2004 -- Consumers are enthusiastically taking advantage of new Health Savings Accounts (HSAs), giving them increased flexibility and choice in health care coverage. According to data released today by Assurant Health (formerly known as Fortis Health), in the first five months since offering HSAs, the company has received 56,396 applications from people interested in individual HSA accounts, of which 43 percent did not indicate any prior health insurance coverage.

At a briefing today, U.S. House Speaker J. Dennis Hastert (R-Ill.) joined leaders from the National Federation of Independent Business/Illinois and the Illinois Chamber of Commerce to review new data on HSA applications presented by Assurant Health president and chief executive officer, Don Hamm.

“It is great to hear so many Americans are taking advantage of this innovative approach to financing their health care,” said Speaker Hastert, sponsor of the HSA legislation. “This is helping put health care spending control into the hands of consumers and helping build a health care financing system that benefits Americans.”

HSAs, the newest concept in the health insurance market, are making health insurance more affordable by allowing consumers to save money in a tax-free account to pay for health care costs. HSAs were approved by Congress as part of the Medicare Prescription Drug, Implementation & Modernization Act in December 2003, and have not only increased health insurance options, but have also helped consumers control their own health care financing. The account is owned by the individual so he or she keeps the account regardless of changes in employment or health insurance company.

Data released today by Assurant Health includes:

  • In the first five months of 2004, Assurant Health has applications representing 56,396 people for individual and family HSAs.
  • 43 percent of HSA applicants did not indicate any prior health insurance coverage.
  • 77 percent of those purchasing HSAs are families with children.
  • 45 percent of HSA purchasers are from households of four or more people.
    HSAs are being purchased by a broad cross section of occupations; less than 57 percent of purchasers were from professional and managerial occupations.
  • 70 percent of HSA purchasers are over age 40.
  • 29 percent of purchasers have family incomes of less than $50,000 per year; and 19 percent of purchasers have family incomes of less than $40,000 per year.
“Our findings show that HSAs are quickly becoming an affordable and beneficial health care financing option for a wide variety of consumers,” said Don Hamm, president and chief executive officer of Assurant Health. “We’ll continue to focus on educating people about the flexibility, choice, and tax advantages of HSAs, because they are a win-win option for consumers.”

The tax advantages of HSAs are many and include the following:

Contributions by an individual, employer or employee are all tax-free; individuals with self-only policies can make a pre-tax annual contribution of $2,600 and families can make an annual contribution of up to $5,150 into an HSA.

Contributions are deductible under federal and some state tax laws.
Employers can save on their FICA taxes.
Any interest earned on the funds in an HSA is tax-free.
Funds withdrawn for qualified medical expenses are tax-free.