San Mateo/CA (Tuesday, December 08, 2015)
SAN MATEO, Calif. --- Dec. 8, 2015 --- Today, WageWorks, Inc. (NYSE: WAGE), a leader in Consumer-Directed Benefits (CDBs), recognizes the twelve year anniversary of the Health Savings Account (HSA). HSAs allow employees to set aside pre-tax money, through payroll contributions, to pay for everyday health expenses, while also saving and investing those dollars to cover future expenses. Employee contributions to HSAs reduce payroll taxes, saving employers money as well. Because HSAs are combined with qualified high deductible, low premium health plans, they make the cost of healthcare more affordable for employees and employers alike.
The HSA was introduced on December 8, 2003, through the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), which allows individuals enrolled in certain high deductible health plans to open and fund an HSA. With rising healthcare costs, HSAs continue to proliferate: From June 30th 2014, to June 30th, 2015, the number of HSA accounts rose to 14.5 million in 2015, holding more than $28.4 billion in assets, a year-over-year increase of 23 percent for total HSA accounts and 25 percent for HSA assets, according to research from Devenir.
In addition to allowing tax-free contributions and withdrawals for qualified expenses, HSAs are emerging as an important investment vehicle as well. Similar to a 401(k), employees deposit funds into their HSA account and earn tax-free interest and investment income year after year. Devenir’s research shows that HSA investors averaged a return of 11.3 percent on a three-year basis.
“We are passionate about helping employers and employees manage rising healthcare costs by utilizing Consumer-Directed Benefits, such as HSAs,” said WageWorks CEO Joe Jackson. “On this 12th anniversary, HSAs have become a very effective and increasingly popular vehicle for individuals to use to plan for their financial future, complementing 401(k)s and other retirement strategies.”
Even with the rapid growth of the HSA, many employees are still woefully unprepared to handle unexpected health care expenses, whether it’s today or during retirement. A survey by AFLAC found that 49 percent of employees have less than $1,000 available to fund out-of-pocket expenses for a serious illness or accident and 53 percent would have to borrow from a 401(k) or use a credit card to cover the costs of such expenses. Another report from the National Institute of Retirement Security found that 92 percent of working households do not meet conservative retirement savings targets for their age and income. An HSA helps employees prepare for present day healthcare expense needs while also creating financial protection for their personal future health.
As a leading administrator of CDBs, such as HSAs, WageWorks’ mission is to help employees live healthier, happier and more productive lives. To learn more about how WageWorks empowers employers and employees to drive down healthcare expenses through HSAs, please download The Definitive Guide to HSAs.
WageWorks (NYSE: WAGE) is a leader in administering Consumer-Directed Benefits (CDBs), which empower employees to save money on taxes while also providing corporate tax advantages for employers. WageWorks is solely dedicated to administering CDBs, including pre-tax spending accounts, such as Health Savings Accounts (HSAs), health and dependent care Flexible Spending Accounts (FSAs), Health Reimbursement Arrangements (HRAs), as well as Commuter Benefit Services, including transit and parking programs, wellness programs, COBRA, and other employee benefits. WageWorks makes it easier to understand and take advantage of Consumer-Directed Benefits for 58,000 employers and approximately 4.5 million people. WageWorks is headquartered in San Mateo, California, with offices in major locations throughout the United States. For more information, visit www.wageworks.com.