At a Glance | September 23, 2021 Contributions to New HSAs Reduce 401(k) Contributions, but Only Marginally Findings from the EBRI/ICI Participant-Directed Retirement Plan Data Collection Project and EBRI’s HSA Database 401(K) CONTRIBUTIONS WITH HSA Over Half of Participants Reduced Their 401(k) Contributions in the First Year They Made HSA Contributions, but not in Significant Amounts The median reduction in 401(k) contributions the first Decile: 10th 30th Median 70th 90th We studied participants over a two-year period who year participants made HSA made their initial HSA contribution in the 2nd year. contributions was $34. The Percentage of 401(k) Change in Contribution Dollar Decrease Increase change ranged from a decrease Participants Who Amount, by Decile of $5,127 at the 10th decile Reduced Their 56% Contributions the Year to an increase of $1,143 at the They Contributed to Their –$5.1k –$34 +$1.1k 90th decile. ++56+I00+100 HSA –$9k 0 $3k 401(K) CONTRIBUTION IMPACT Those Contributing the Most to Their 401(k) Experienced the Largest 401(k) Declines at the Median in the First Year of HSA Contributions Contributions to 401(k) plans were unaffected among Amount of 401(k) % That Reduced Change in Contribution Dollar Decrease Increase participants contributing Contribution 401(k) Contribution Amount, by Decile $8,500 or less in Year 1. < $1.7k 50% However, contributions C0+50+0++100 –$0.8k $0 +$0.6k decreased $540 among $1.7–3.8k those contributing $8,501 49% +10049+0+C0+ –$2.1k $1 +$0.9k or more. $3.8—8.5k 53% 0++10053+0+C –$5.5k –$13 +$1.5k $8.5k + 70% C+010070+0++ –$12.9k –$540 +$2k –$9k 0 $3k HSA CONTRIBUTION IMPACT 401(k) Contributions Decreased as HSA Contributions Increased Higher HSA contributions Amount of HSA % That Reduced Change in Contribution Dollar Decrease Increase were associated with lower Contribution 401(k) Contribution Amount, by Decile 401(k) contributions. Among < $1k 53% HSA participants contributing 100++00+C53+ –$3.4k –$8 +$0.9k $1,000 or less, median 401(k) $1k–2k 56% contributions fell only $8. C56+0+100++0 –$5.9k –$39 +$1.3k Contributions fell $315 among HSA participants contributing $2k–4.35k 60% 0++100C60+0+ –$7.7k –$161 +$1.6k more than $4,350. $4.35k + 63% C63+0+100++0 –$8.7k –$315 +$2.1k –$9k 0 $3k SOURCE: Spiegel, Jake, and Paul Fronstin, “Two’s a Crowd: Do HSA Contributions Crowd out 401(k) Contributions?,” EBRI Chartbook (Employee Benefit Research Institute, February 2021). © 2021 EBRI This report is copyrighted by the Employee Benefit Research Institute (EBRI). You may copy, print, or download this report solely for personal and noncommercial use, provided that all hard copies retain any and all copyright and other applicable notices contained therein, and you may cite or quote small portions of the report provided that you do so verbatim and with proper citation. Any use beyond the scope of the foregoing requires EBRI’s prior express permission. For permissions, please contact EBRI at permissions@ebri.org.