Retained and Invested HSA Assets Grow

Through the first half of 2018, total contributions to health savings accounts (HSAs) were $19,753,000,000, while withdrawals totaled $13,695,000,000, revealing retained assets so far this year of $6,058,000,000, or 31% of balances, according to Devenir’s 2018 Midyear HSA Market Statistics & Trends.

The study also estimates that $9.8 billion of HSA assets are invested as of June 30, 2018—an estimated 45% year-over-year increase. Nineteen percent of all HSA assets are in investments as of June 30th, 2018. Further, those who have HSA assets invested have a $16,007 average total balance, more than eight times larger than a non-investment holder’s average account balance.

These stats are revealing as more plan sponsors and advisers see HSAs as a way to save for retirement expenses, and investing options in HSAs improve savings potential.

Other trends

The study found account growth in the first half of 2018 was in-line with recent years. Overall, accounts grew by 5.2% in the first half of 2018, compared with 5.0% in 2017, 8.5% in 2016, and 5.5% in 2015.

Devenir continues to see seasonality in the percentage of accounts that are unfunded as accounts are opened during the fall open enrollment season, but often not funded by employers until the beginning of the following year. Halfway through 2018, about 15% of all accounts were unfunded, down from 20% a year ago. The company notes this drop off in the percentage of unfunded accounts can largely be attributed to a continued uptick in the closure of accounts, with many HSA providers noting that they were cleaning up dormant accounts.

Nearly one-third (32%) of all HSA dollars contributed to an account came from an employer. The average employer contribution was $658 (for those making contributions). More than half (52%) of all HSA dollars contributed to an account came from an employee. The average employee contribution was $1,086 (for those making contributions).