HSAs Continue to Grow in Popularity

A Devenir report finds more employees are also investing their HSA assets.

A Devenir Research market report studied how health savings accounts (HSAs) have grown throughout the past year and how they have continued to evolve in 2021.

As the industry shifts to place more emphasis on overall financial well-being, especially in light of the impacts of the coronavirus pandemic, more HSA holders are investing their assets. According to the findings, HSA assets increased to $87.3 billion held in more than 31 million accounts by end of January, and 1.7 million accounts were investing a portion of their HSA dollars. On average, investment account holders have a total balance of $17,975, including deposits and investments.

Additionally, the Devenir study reports that just about half of workers contributed more to their HSAs than they took out. Employees contributed 59% of all HSA dollars to their accounts last year, with 49% adding more than they withdrew in 2020.

Twenty-six percent of all HSA dollars contributed to an account came from an employer by year-end 2020, with the average employer giving $870. The average employee contribution was $2,054. Other contributions came from individuals who are not enrolled in an employer-sponsored account or from individual retirement account (IRA) rollovers, according to Devenir.

While the study shows the total number of HSAs has grown steadily since 2011, that growth unsurprisingly slowed down in 2020 because of the pandemic, Devenir said. Yet the percentage of unfunded accounts also decreased by the beginning of 2021, down to 18% from 21%.  

Looking toward the rest of 2021, the report notes HSA providers project an industry asset growth of 16% this year.