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 13 million HSAs, 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 2021 include:
- Despite a rebound in out-of-pocket health care spending in 2021, HSA balances increased on average over the course of the year. Patients sought health care services more frequently in 2021 — and spent more out of pocket, as well — than they did in 2020, yet the average end-of-year balance was higher than the average beginning-of-year balance. And the average balance increase was even larger when analyzing only accounts that had received a contribution in 2021.
- Accounts that received an employer contribution saw higher total contributions and were more likely to invest. This may be a sign that employer contributions can play a pivotal role in fostering accountholder engagement with their HSAs. Our analysis also indicates, however, that these accountholders were more likely to take more frequent and larger distributions.
- Most accountholders took a distribution in 2021. More than half of HSAs in EBRI’s database saw a distribution in 2021, and the average distribution was $1,786.
- Still relatively few HSAs are invested. One of the largest advantages HSAs offer is the ability to invest assets within the account. However, our analysis reveals that only 12 percent of accountholders invested their HSAs in assets other than cash.
- Age and tenure play a major role in HSA utilization. As accountholders age, we find systematic differences in how they use their HSAs. Older accountholders tended to have higher average contributions and higher average balances than younger accountholders. Similarly, accountholders who have had their HSAs for a longer period of time tended to have higher average contributions, higher average balances, and invested their balances in assets other than cash more frequently.