HSA Contributions Declined in 2014

Contributions to health savings accounts (HSAs) from workers and employers are decreasing, according to research from the Employee Benefit Research Institute (EBRI).

In a new report, “Employer, Worker Contributions to Health Savings Accounts Are Decreasing,” EBRI explains that HSAs are an important element of so-called “consumer-driven” health plans (CDHPs), a health care benefit approach that some employers use to make employees more cost conscious and efficient in their use of health benefit dollars (see “CDHPs Make Employees More Cost Conscious”). EBRI’s researchers note HSAs often employ a combination of high deductibles (at least $1,250 in 2014) and tax-preferred savings or spending accounts that workers and their families can use to pay their out-of-pocket health care expenses.

EBRI’s report finds about 15% of the U.S. working population was enrolled in some form of CDHP in 2014, representing about 26 million individuals with private insurance. Among this group of individuals enrolled in a CDHP, 57% (or 9.3 million) had opened a health reimbursement account (HRA) or had opened an HSA, while 43% were enrolled in an HSA- or HRA-eligible health plan but had not opened an account.

The analysis goes on to note more than two in three workers with an HRA or HSA reported that their employers contributed money to the account in 2014—denoting a slight drawdown in employer payments to health-dedicated accounts.

“The percentage of workers with an HRA or HSA-eligible health plan whose employers contributed to the account had steadily increased since 2009 and reached its highest level of 71% in 2013 since the inception of EBRI surveys monitoring trends in health accounts,” the researchers explain. “It fell to 67% in 2014.”

This matches the general trend of employee contributions, which grew annually until 2011, but have declined since then. “Between 2006 and 2011, the percentage of individuals with employee-only coverage contributing nothing to an HSA decreased from 28% to 11%,” EBRI says. “At the same time, the percentage contributing $1,500 or more increased from 21% in 2006 to 44% in 2011.”

Then, between 2011 and 2014, EBRI says the percentage of individuals reporting that they contributed nothing to their HSA increased from 11% to 23%, and the percentage reporting that they contributed $1,500 or more fell from 44% to 30%.

Among individuals with individual coverage and employer contributions, the percentage with contributions between $200 and $999 decreased, while contributions of $1,000 or more increased in 2014. “Both lower- and higher-income individuals slightly lowered their contributions in 2014, and lower-income individuals were less likely to contribute anything than higher-income individuals,” the report adds.  

The findings are based on results in the 2008 to 2014 EBRI/Greenwald & Associates Consumer Engagement in Health Care Survey (CEHCS), and the 2006 and 2007 EBRI/Commonwealth Fund Consumerism in Health Care Survey.  The full report, “Employer and Worker Contributions to Health Reimbursement Arrangements and Health Savings Accounts, 2006 - 2014,” is published in the March 2015 EBRI Notes, online at www.ebri.org.