Fidelity Investments announced that they are seeing significant growth in their Health Savings Account business. They’ve added 14 new HSA clients which marks a 52% increase over the previous year. In a news release the company explained how customers using Fidelity HSA are taking advantage of tax benefits of having this medical account.

On average, participants contributed $2,620 in 2010 which included both personal additions and employee contributions. “The continuing rise of health care costs combined with health care reform really drove the adoption of HSA-qualified health plans  by employers last year and thus the growth of HSAs,” said William Applegate, vice president, HSA products, Fidelity Investments in a company news release.  “As for participants, it is clear that many are using the health-savings product to help manage not only their current medical expenses but also plan for future expenses, with nearly all participants carrying some balance over to the following year.”

Currently Fidelity has 74,000 HSA participant accounts. One in five of those participants contributed more than $5,000 to their account in 2010. About half added around $2,500 in 2010. By law, in 2011 the maximum an individual can contribute is $3,050 and for families that number is $6,150. HSA’s allow consumers to make pre-tax contributions, realize tax-free growth and make withdrawals for qualified medical expenses.

High deductible insurance plans are presented as the answer to those who cannot afford high insurance premiums. With so many people currently uninsured or who have trouble paying for their health insurance, these high deductible plans seem like the answer.

Everyone knows that going without health insurance is unacceptable so perhaps this is the workable alternative.

Any way to save money on health care costs is worth looking into. Health savings accounts allow you to plan ahead and set aside money that will be spent on health care costs in the coming year.