Chase has seen significant growth in its Health Savings Accounts – where customers can move tax-advantaged funds for medical expenses – with the banking giant reporting a 30 percent increase in HSAs for 2009 over the previous year.
Chase added 115,000 HSAs and $220 million in deposits last year, bringing its total to 500,000 health savings account holders with $740 million.
The HSA growth was due primarily to Chase partnerships with national and regional health plans, the bank said. It also offered HSA programs directly to employers, including Fortune 500 businesses. It gained a total of 700 clients last year.
Chase – the nation’s second largest bank and the top credit card issuer – also reported that HSA customers are opting for long-term investment options. The bank saw a 45 percent increase in customers who invested balances in mutual funds offered through Chase’s program.
Health Savings Accounts (HSAs) were created by the Medicare Prescription Drug, Improvement and Modernization Act of 2003, signed into law by President Bush. HSAs help individuals save for qualified medical and retiree health expenses on a mostly tax-free d basis.
According to the U.S. Treasury, any adult who is covered by a high-deductible health plan – and has no other first-dollar coverage – may establish an HSA. The Treasury says that tax-advantaged contributions can be made in three ways:
- the individual or family can make tax deductible contributions to the HSA even if they do not itemize deductions;
- the individual’s employer can make contributions that are not taxed to either the employer or the employee; and
- employers sponsoring “cafeteria plans” can allow employees to contribute untaxed salary through salary reduction.
Chase said its customers can no transfer funds directly from their checking or savings account to their HSA through a secure website. They can also pay their medical expenses online from their HSA.