Another straw in the wind about the growing popularity of HSAs is shown in the newest analysis released by Assurant Health.

The company reported that 37% of its new individual medical sales have been HSAs. As of the end of June, 2005, it reported receiving Individual Medical HSA applications to cover over 200,000 people.

Equally as interesting, as of September 16, 2005, Assurant reported the following:

• 70% of HSA purchasers are families with children
  
  
• 61% of HSA purchasers are over age 40
  
  
• 29% of HSA purchasers are from households of four or more people
  
  
• 31% of all HSA purchasers have high school or technical school training as their highest level of education
  
  
• 44% of HSA applicants did not indicate having prior health insurance coverage on their application
  
  
• 29% of HSA purchasers have family incomes of less than $50,000
  
  
• 20% of HSA purchasers have family incomes of less than $40,000
  
  
• 19% of HSA purchasers have a net worth of less than $25,000

WHAT ARE HSAs?

Signed into law by President George W. Bush as part of the Medicare Prescription & Modernization Act in December 2003, HSAs:

• Provide a vehicle for tax-advantaged health savings
  
  
• Not only increase health insurance options, but also help consumers control their own health care costs
  
  
• Make health insurance more affordable by allowing consumers to save money in a tax-free account to pay for health care costs
  
  
• Allow individuals with self-only policies to make a pre-tax annual contribution of $2,650 and families to make an annual contribution of up to $5,250 into HSA accounts

HOW ARE HSAs BENEFITING CONSUMERS?

• HSAs are combined with a qualifying high deductible health insurance plan to provide major medical protection and significant savings on premiums
  
  
• Funds contributed to an HSA belong to individuals and are completely portable; they can be carried from job to job and into retirement
  
  
• HSAs can be used during retirement to pay for retiree health care, Medicare expenses and prescription drugs
  
  
• HSAs are available to all individuals with a qualified high deductible insurance plan, and offer consumers more flexibility, choice and tax advantages

WHAT ARE THE TAX ADVANTAGES OF HSAs?

• Contributions by an individual, employer or employee are all tax-free
  
  
• Contributions qualify for federal tax deductibility
  
  
• Employers can save on their FICA taxes
  
  
• Any interest earned on the funds in an HSA are tax-free
  
• Funds used for qualified medical expenses are tax-free

WHAT CAN HSA FUNDS BE USED FOR ON A TAX-FREE AND PENALTY-FREE BASIS?

• Qualified medical expenses as defined under Section 213 of the IRS Code
  
  
• COBRA insurance
  
  
• Health insurance premiums for individuals receiving unemployment compensation
  
  
• Qualified long-term care insurance and expenses
  
  
• Medicare and retiree health insurance premiums, but not Medicare supplement premium

Assurant Health products are issued and underwritten by Time Insurance Co., John Alden Life Insurance Co., and Union Security Insurance Co.