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 workers. Based on its unique database of more than 14 million HSAs, the Employee Benefit Research Institute (EBRI) seeks to shed light on the ways HSA accountholders contribute to, withdraw from, and invest their HSAs. Such analyses can not only inform strategies for plan sponsors wishing to help workers better utilize their HSAs, but also help HSA providers better position their offerings, as well as help policymakers craft sound policy.
Key findings from 2023 year-end data include:
- HSA balances continued to increase over the course of the year, despite higher spending on health care. Out-of-pocket patient spending on health care increased in 2023, rising 7.5 percent over 2022. Still, average end-of-year HSA balances were higher than average beginning-of-year balances. Average balances increased at an even faster rate in 2023, conditional on those accounts receiving either an employee or employer contribution over the course of the year.
- Accounts that received an employer contribution saw higher total contributions and were more likely to invest. Employers seeking to help their workers engage with their HSAs may find employer contributions to be a useful tool, as accountholders who received an employer contribution on their behalf had higher average total contributions and were more likely to invest. Our analysis indicates, however, that these accountholders were also more likely to take more frequent and larger distributions.
- Most accountholders took a distribution in 2023. More than half of the HSAs in EBRI’s database saw a distribution in 2023, and the average distribution was $1,801.
- 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 15 percent of accountholders invested their HSAs in assets other than cash.
- Age and tenure play a major role in HSA utilization. Consistent with previous findings, accountholder age — as well as accountholder tenure — is closely related to average balances, contributions, and distributions, as well as the propensity to invest. On average, older accountholders contributed more to their HSAs, had higher balances, more frequently took distributions, and had a higher likelihood of investing at least some portion of their HSA in assets other than cash.