Health plans with accompanying health savings accounts have been around for a decade, and the Employee Benefit Research Institute known as EBRI expects 30% of large employers will offer them as their only health plan by next year. EBRI estimates nearly 11 million HSAs exist today, holding $19 billion in assets, and reports that 70% of them were opened since 2011.
Another five to 10 million employees are eligible to open HSAs under their health plan, but have not yet done so. Benefit advisers may view this as an opportunity to help employers secure greater employee utilization of this tax-favored medical savings mechanism.
Not every HSA holder is on track to amass a deep financial war chest to prepare for health expenses they could incur down the road or in retirement at least not yet. Last year the average HAS account balance for employees under age 25 was $697, and $4,460 for those at least 65.
Average annual contribution amounts vary widely. Other than those employees who make no individual contributions (46%), the next largest contribution cohort was the $100-$999 range, representing 17% of the total. A modest 12% contribute $1,000-$1,999; 15% between $2,000 and $4,999; 3% between $5,000 and $6,499, and 2% contribute $6,450 or more. These numbers do not include employer contributions.
About half of employees with HSAs contributed to them last year, according to EBRI. However, due to the fact that about half of the plans include an employer contribution, the proportion of HSAs receiving contributions last year around 70% is higher than the 50% employee contribution rate.
Of those HSAs that did have an employee contribution, only 5% received the maximum $6,450 contribution (or $7,450 for employees 55 and older, thanks to the $1,000 permissible catch-up contribution). The average individual contribution was $2,032.
Here are some additional highlights of EBRIs latest HSA research:
- 80% of HSAs that received a contribution last year also had a distribution for a health claim
- The average distribution amount for a health claim was $1,953
- Distribution amounts are age-correlated, although this trend significantly drops after age 65, due to Medicare coverage; average annual contributions for those age 25 and under was $667 versus $2,335 for those between age 55 and 64.
Stolz is a freelance writer based in Rockville, Md.
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