Summary
Executive Summary
The Employee Benefit Research Institute (EBRI) developed the EBRI HSA Database to analyze the state of and individual behavior in health savings accounts (HSAs). The HSA database contained 5.5 million accounts with total assets of $11.3 billion as of Dec. 31, 2016.
This Issue Brief is the fourth annual report drawing on cross-sectional data from the EBRI HSA Database. It examines account balances, individual and employer contributions, distributions, invested assets and account-owner demographics in 2016.
Here are the key findings and insights:
HSAs are a significant part of employment-based health benefit programs.
- Enrollment in high-deductible, HSA-eligible health plans was estimated to be between 20.2–22.6 million policyholders and their dependents, and covered nearly 3 in 10 employees in 2016. The HSA market did not exist until 2004.
- Similarly, there were an estimated 20 million HSAs as of the end of 2016. Most HSAs in the EBRI HSA Database are relatively new; more than 3 in 4 HSAs (77 percent) have been opened since 2013.
HSA balances increased in 2016.
- Two-thirds of account holders ended 2016 with positive net contributions, meaning annual contributions were higher than annual distributions.
- Over 90 percent of HSAs with individual or employer contributions in 2016 ended the year with funds to roll over for future expenses.
- As of the end of 2016, the average HSA balance among account holders with individual or employer contributions in 2016 was $2,532, up from $1,604 at the beginning of the year.
- Only 3 percent of HSAs had invested assets (beyond cash).
Contributions and distributions drive account balances.
- On average, individuals who made contributions in 2016 contributed $1,986 over the year and HSAs receiving employer contributions in 2016 received $935. But only 13 percent of account holders contributed the fully allowable annual amount.
- Three-fourths of HSAs with a 2016 contribution also had a distribution during 2016. Of the HSAs with distributions, the average amount distributed was $1,766, less than the average contribution, resulting in balance increases.
- The presence of individual or employer contributions were associated with an increase in account balances in 2016—even if account holders took a distribution.
Investing does not maximize longer-term savings.
- Investors (beyond cash) had much higher account balances than non-investors.
- While it might be expected that individuals who invested their account balance were using the account solely as a long-term savings vehicle, the opposite appears to have been true. Both investors and non-investors used the HSA to self-fund current uninsured medical expenses.
- Investors were more likely than non-investors to take a distribution (69 percent and 63 percent, respectively). In fact, when distributions were taken, investors took larger distributions ($2,451) than non-investors ($1,740) during 2016. However, the larger distributions may have been because they had larger account balances.