Many HSA Holders Withdrew More Than They Contributed: EBRI

One-third of health savings account holders withdrew more than they contributed, despite balances ultimately increasing in 2023, according to an Employee Benefit Research Institute study.

The report summarizing the study, “Health Savings Account Balances, Contributions, Distributions, and Other Vital Statistics, 2023: Evidence From the EBRI HSA Database,” was based on EBRI’s HSA Database, which comprises 14.5 million account holders.

“HSA-eligible health plans are an important part of the health benefits landscape. Yet, there is little empirical research about how HSAs are used by workers,” said Jake Spiegel, one of the co-authors of the report and a senior research associate for health and wealth at EBRI, in a statement. “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.”

The report stated that one of the largest advantages HSAs offers is the ability to invest assets within the accounts and let investments grow on a tax-free basis. However, the report’s analysis revealed that only 15% of account holders invested their HSAs in assets other than cash.

In addition, only 43% of account holders received an employer contribution. Accounts that received an employer contribution had higher total contributions and were more likely to invest.

More than half of the HSAs in EBRI’s database had a distribution in 2023, and the average distribution amount was $1,801, according to the report.

The Republican tax bill making its way through Congress includes several provisions that would expand HSAs.

The EBRI HSA Database includes $48.4 billion in assets.