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 5.9 million accounts with total assets of $13 billion as of Dec. 31, 2017. This Issue Brief is the fifth 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 2017.
HSAs are a significant and growing part of employment-based health benefit programs.
- Enrollment in high-deductible, HSA-eligible health plans was estimated to be between 21.4 and 33.7 million policyholders and their dependents and covered nearly 3 in 10 employees in 2017. The HSA market did not exist until 2004.
- Similarly, there were an estimated 22.2 million HSAs as of the end of 2017. Most HSAs in the EBRI HSA Database are relatively new; 73 percent have been opened since 2014.
HSA balances increased in 2017.
- Two-thirds of account holders ended 2017 with positive net contributions, meaning annual contributions were higher than annual distributions.
- 95 percent of HSAs with individual or employer contributions in 2017 ended the year with funds to roll over for future expenses.
- As of the end of 2017, the average HSA balance among account holders with individual or employer contributions in 2017 was $2,764, up from $1,873 at the beginning of the year. Only 5 percent of accounts with contributions ended 2017 with a zero account balance.
Contributions to HSAs are rarely maximized.
- One-half of HSA owners contributed to their account in 2017, and 36 percent of HSAs did not receive any contributions (individual or employer) in 2017.
- Among accounts with contributions, individual contributions in 2017 averaged $1,949, and employer contributions averaged $895.
- Only 13 percent of account holders contributed the fully allowable annual amount.
- Three-fourths (77 percent) of HSAs with a 2017 contribution also had a distribution during 2017. Of the HSAs with distributions, the average amount distributed was $1,724, less than the average contribution, resulting in balance increases.
Investing does not maximize longer-term savings.
- Only 4 percent of HSAs had invested assets (beyond cash).
- 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 medical expenses.
- Investors were more likely than non-investors to take a distribution (69 percent and 64 percent, respectively). In fact, when distributions were taken, investors took larger distributions ($2,293) than non-investors ($1,696) during 2017. However, the larger distributions may have been because they had larger account balances.