After a recession-induced lull, health savings accounts (HSAs) regained popularity in 2011, and now total $12.4 billion in assets, spread over 8.4 million accounts.
HSAs are tax-exempt trusts that individuals can use to pay for health-care expenses. They must be coupled with high-deductible health insurance plans designed to cover only the most catastrophic illnesses and injuries. Individuals pay for everything else with funds from their HSAs, which are investment accounts that can roll over from year to year.
The average HSA balance was $1,490 in 2011, according to theResearch Institute.
More cost-conscious employers have begun exploring offering HSAs and high-deductible insurance as an alternative to traditional employer-provided health benefits.