HSA Assets Surpass $100 Billion Milestone

Health savings accounts surpassed $100 billion in total assets for the first time in 2022, and accounts experienced robust asset growth early in 2023, new research from HSA consultant Devenir Group LLC shows.

Total assets in health savings accounts were buoyed by strong market returns and the influx of January contributions, reaching $112.5 billion at the end of January, up 8% since year-end 2022, the Devenir January 2023 Supplemental Survey found.

“Despite significant market headwinds, we saw more health savings accounts utilizing investments than ever before as account holders continue to recognize the long-term growth potential that HSAs offer,” stated Jon Robb, senior vice president of research and technology at Devenir, in a press release.

Holders fund the HSA accounts through payroll or individual deferrals, much as they contribute to a workplace retirement plan or IRA. Employers can seed the accounts with annual contributions and offer matching contributions when employees contribute, while employees contribute individually.

With health care costs rising, many employers are  managing employee health care expenses with a high-deductible health plan, in which workers pay a lower monthly premium but a higher deductible. High-deductible health plans can be paired with health savings accounts as an additional benefit for employees.

Looking Forward From Last Year

At the end of 2022, accounts held $104 billion in 35.5 million accounts—a year-over-year increase of 6% for assets and 9% for accounts—according to the “2022 Year-End Devenir HSA Research Report.”

Invested account dollars—HSA assets not held in cash deposits—were $33.8 billion at year-end 2022, compared to $34.4 billion a year earlier and $23.8 billion at the close of 2020, Devenir found.  

“The pace of account growth remained strong throughout 2022 after the COVID-19 pandemic and related impacts to the employment market began to subside,” the report stated.

At year-end 2021, total HSA assets were $98 billion held in 32.5 million accounts, with $63.6 million in cash deposits, data shows.

HSA providers project asset growth of 13% in 2023, forecasting their own business will increase by 17% for the period, the Devenir report found. The firm projects the HSA market will near 43 million accounts by the end of 2025, holding almost $150 billion in assets.

Contribution Sources

Devenir identified several sources of 2022 account contributions.

Employees contributed 63%, employers contributed 26% and individual contributions (made outside of workplace deferrals) were 11%, the data showed.

The average employer contribution was $869, the average employee contribution was $2,147 and the average individual contribution outside of workplace deferrals was $2,037, Devenir’s research showed.   

Account Balances

More than half (52%) of HSAs hold less than $499, the Devenir said. The full breakout is as follows:

• 21% of accounts had $0 in assets;
• 31% of accounts held between $1 and $499;
• 11% accounts held between $500 and $999;
• 11% held between $1,000 and $1,999;
• 13% held between $2,000 to $4,999;
• 7% held between $5,000 and $9,999;
• 5% held between $10,000 and $24,999; and
• 2% of accounts have assets of $25,000 or more.

Account Holders Delay Funding

Benefits open enrollment season for employers effects account holders’ funding, Devenir data showed. Accounts opened during the fall open enrollment season often remain unfunded until early the following year, a pattern that has held since at least 2011, the earliest year for which Devenir provided data.

• There were 32.5 million accounts open that were left unfunded at year-end 2021, and by mid-year 2022, 33.9 million were funded;
• 30.2 million open accounts were unfunded at year-end 2020, and by mid-year 2021, 31.1 million were funded; and
• 28.3 million open accounts were unfunded at year-end 2019, and by mid-year 2020, 29.3 million were funded.

Accounts opened in 2022 had an average balance of $1,436, compared to a $1,420 average balance at the end of 2021 for accounts opened in 2021, data shows.

“We believe a contributing factor to the trend of newer accounts having higher balances is a result of HSA providers reporting M&A or account transfers from existing accounts in 2022 as having been opened the same year,” the report stated.

Devenir gathered the data in the 2022 Year-End HSA Market Survey. The survey was conducted in early 2023 and largely consisted of responses from the largest 100 providers in the HSA market. All data was requested for the period ending December 31, 2022.