WASHINGTON - Health savings accounts (HSAs) are being increasingly used by small businesses and consumers who have struggled to afford health insurance coverage, according to a member census conducted by America's Health Insurance Plans (AHIP).

The AHIP census indicates that HSAs covered 3,168,000 people in January 2006, more than triple the 1,031,000 AHIP reported in March 2005. "We continue to see significant growth in both the individual and employer markets," said Karen Ignagni, AHIP president and CEO.

In the small business market, 33 percent of policies were purchased by companies that previously did not offer coverage. In the individual market, 31 percent of new enrollees in HSA plans were previously uninsured.

An HSA is an account to which individuals and employers can contribute funds for future medical expenses. Earnings on HSA funds accumulate tax-free, balances can be rolled over year-to-year, and withdrawals made for qualified medical expenses are tax-free.

HSAs were created as part of the Medicare Modernization Act that was signed into law in December 2003 and first became available to consumers and employers in January 2004.

For a full report on the AHIP census, visit www.ahipresearch.org.

For information on companies that currently offer HSA-eligible health insurance plans, including a state-by-state locator, visit www.healthdecisions.org/HSA.

Publication date: 03/27/2006