HSA Growth Continues, With Plan Sponsors Calling for More Education
The latest PSCA survey revealed rising health savings account usage, with employers advocating for more education to further participant uptake.
Employee contributions and average account balances in health savings accounts are continuing to creep up, though plan sponsors see further participant education as key to boosting HSAs even further, according to the results of the sixth annual HSA Benchmarking Survey conducted by the Plan Sponsor Council of America.
According to the survey, the average participant contribution was $2,609 in 2023, up from $2,323 the previous year. Similarly, average account balances ended the year at $6,165, reflecting a slight increase from $6,130 in 2022.
About 30% of employers are positioning health savings accounts as part of a broader retirement savings strategy. That is down from a little more than 40% in 2022, but still ahead of 27% marked in 2021, according to prior PSCA reports.
Meanwhile, only 30% of employers allow participants to view or manage HSA balances through their retirement portals, according to PSCA.
| Organization size (number of employees) | |||||
Position HSA as retirement strategy | 1 – 49 | 50 – 199 | 200 – 999 | 1,000 – 4,999 | 5,000+ | All |
Yes | 22.5% | 24.3% | 32.6% | 30.1% | 31.6% | 27.4% |
No | 72.9% | 63.6% | 57.2% | 58.9% | 57.9% | 63.1% |
Not yet, but planning to | 4.7% | 12.1% | 10.1% | 11.0% | 10.5% | 9.5% |
Organization size (number of employees) | ||||||
Participants can view or load their HSA balance in their retirement portal | 1 – 49 | 50 – 199 | 200 – 999 | 1,000 – 4,999 | 5,000+ | All |
Yes | 32.5% | 24.8% | 23.5% | 33.8% | 36.4% | 28.4% |
Despite the potential for HSAs to augment retirement saving, 87% of employers reported that their HSA investment options do not mirror their 401(k) investment lineups., 87% of employers reported that their HSA investment options do not mirror their 401(k) investment lineups. However, this figure is down 5% from 2022, indicating a gradual shift in alignment.
| Organization size (number of employees) | |||||
HSA funds mirror 401(k) funds | 1 – 49 | 50 – 199 | 200 – 999 | 1,000 – 4,999 | 5,000+ | All |
All funds are the same | 0.0% | 2.3% | 2.0% | 3.3% | 3.2% | 2.0% |
Some funds are the same | 4.6% | 4.5% | 7.9% | 8.3% | 9.7% | 6.7% |
No, but it is a goal | 3.1% | 3.4% | 5.0% | 5.0% | 6.5% | 4.3% |
No, and it is not a goal | 92.3% | 89.8% | 85.1% | 83.3% | 80.6% | 87.0% |
The survey found that education remains a top priority for employers aiming to boost HSA participation. The dominant focus of educational efforts was explaining the tax benefits of HSAs and contribution limits. Another topic of significance targeted by HSA education was saving HSA funds for retirement.
| Organization size (number of employees) | |||||
Priorities in Participant Education | 1 – 49 | 50 – 199 | 200 – 999 | 1,000 – 4,999 | 5,000+ | All |
Understanding the tax benefits of the HSA | 61.3% | 73.3% | 79.1% | 81.9% | 78.4% | 73.5% |
Contribution limits | 54.0% | 54.1% | 68.7% | 69.4% | 70.3% | 61.4% |
Choosing between HSA and 401(k)/403(b) plan contributions | 8.1% | 8.1% | 10.4% | 8.3% | 16.2% | 9.4% |
Saving HSA funds for retirement | 38.7% | 40.7% | 52.2% | 55.6% | 51.4% | 46.2% |
Rollovers | 6.5% | 11.1% | 20.9% | 20.8% | 27.0% | 15.1% |
The survey highlighted increased adoption and usage of HSAs overall. High-deductible health plans tied to HSAs are gaining traction, with 60% of employees opting for an HSA-qualifying health option when available. Among eligible employees, 90% held an HSA in 2023, with three-quarters actively contributing to their accounts.
The survey analyzed the experiences of more than 500 employers offering HSA-qualifying health options in 2023. PSCA conducted the survey in the summer of 2024.