Summary
Health savings account (HSA)-eligible health plans are an important part of the health benefits landscape, yet there is little empirical research on how HSAs are used by employees. Based on its unique database of more than 10 million HSA accounts, the Employee Benefit Research Institute (EBRI) seeks to shed light on the ways HSA accountholders contribute to, withdraw from, and invest in their HSAs. Such analyses can help not only plan sponsors but also providers and policymakers better understand strategies that can help improve utilization of HSAs and, ultimately, overall employee financial wellness.
Key findings for 2019 are that:
- HSA accountholders are increasingly building up savings in their HSAs: The average end-of-year balance ($2,672) was higher than the average beginning-of-year balance ($2,187). The average balance increase was even larger when analyzing only accounts that had received either an employee or employer contribution in 2019 ($2,232, increasing to $3,055).
- Employer contributions can play a key role in engaging HSA users: Accounts that received an employer contribution had higher total contributions ($2,846 vs. $2,455) and more frequently contained investments other than cash (9 percent vs. 7 percent). However, these accounts also had larger and more frequent distributions than accounts that did not receive an employer contribution.
- The average HSA had a distribution: 63 percent of HSAs experienced a distribution in 2019. Most accounts (55 percent) that did not record a distribution also did not receive either employee or employer contributions. This suggests that the lack of distributions was not because accountholders are increasingly using HSAs as savings vehicles but rather because the accountholder has become disengaged from the account.