Devenir HSA Market Survey Shows Strong Growth in 2017

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Health savings accounts (HSAs) recorded double-digit account and asset growth in 2017 as the number of individuals covered by HSA-compatible high deductible health plans (HDHPs) continues to increase year over year. A huge driver of this growth is employers. Expectations are that this trend will continue as employers continue moving to HDHPs.

Devenir, which specializes in customized investment solutions for HSAs and the consumer-directed healthcare market, conducts annual HSA market surveys of the top 100 HSA providers. Devenir’s 2017 Year-End HSA Market Statistics and Trends report shows that the number of HSAs exceeded 22 million at year-end 2017, holding about $45.2 billion in assets—an 11 percent year-over-year increase for accounts and a 22 percent increase for HSA assets.

Strong HSA Asset Growth

As the face of health care has seen many changes since HSAs first became available in 2004, the HSA market continues rapid growth. Devenir’s annual survey estimates show that in the past five-year period alone, both the number of HSAs and the total HSA assets have more than doubled.

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Employers Drive Growth

With more employers moving towards high deductible health insurance coverage, they have become the driver of new HSAs. Devenir estimates that direct employer relationships accounted for 41 percent of new accounts opened in 2017, up from an estimated 32 percent for 2016.

Of a total $27.6 billion HSA contributions made in 2017, Devenir estimates that

  • 21 percent were made by employers ($604 average employer contribution),
  • 63 percent were made by employees ($1,921 average employee contribution), and
  • 14 percent were made by individuals not associated with an employer ($1,475 average individual contribution).

Most HSA owners withdraw HSA assets every year to cover medical costs. When comparing 2017 contribution and withdrawal activity, 18 percent ($5 billion) of the assets were retained at year-end 2017, compared to 22 percent ($5.7 billion) at year-end 2016.

Continued Investment Growth

The bulk of HSA assets are held in deposit accounts that at best generate minimal interest, but more HSA owners are putting their HSA savings—or at least a portion thereof—in market-based investments, such as mutual funds. Solid returns in recent years have helped increase the appeal for HSA investments.

Devenir estimates that at year-end 2017, $8.3 billion of HSA assets were held in investments. Further, the average investment account owner had a $16,457 average total balance (both deposits and investments). According to Devenir surveys, investments in HSAs have quadrupled in the past five years.

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Devenir conducts the annual market surveys in an effort to shed light on the growing and evolving HSA market. See Devenir’s 2017 Year-End HSA Market Statistics & Trends summary for more HSA survey data.