HSA Investment Accounts Continue to Expand

More than a third of health savings accounts (HSAs) with investment assets beyond cash ended 2015 with a balance of $10,000 or more, according to a new report.

The report, by the non-partisan Employee Benefit Research Institute (EBRI), noted that while only about 3% of HSAs had invested assets (beyond cash), more than a third (36%) of HSAs with invested assets ended 2015 with a balance of $10,000 or more, compared with just 4% of HSAs without invested assets. The report was drawn from information in the EBRI HSA database, which contains four million accounts with total assets of $7.4 billion as of Dec. 31, 2015. It is estimated that in total, there were 16.7 million HSAs holding $30.2 billion in assets as of Dec. 31, 2015.

Among HSAs with investments in the EBRI database, accounts opened in 2015 ended the year with an average balance of $4,907, while those opened in 2005 had an average balance of $27,903 at the end of 2015.

HSAs can, of course, be invested in the same investment options that have been approved for individual retirement accounts (IRAs) — i.e., bank accounts, certificates of deposit (CDs), money market funds, stocks, bonds, and mutual funds. However, many HSA custodians require that an HSA have at least a minimum balance in order to invest HSA funds in options beyond cash or cash equivalents, and some HSA custodians do not offer investment options beyond cash.

As of the end of 2015, the average HSA balance in the EBRI database was $1,844, up from $1,332 at the beginning of the year. Average account balances increased with the age of the owner of the account, averaging $759 for owners under age 25 and $3,623 for owners ages 65 and older.

On average, individuals who made contributions in 2015 contributed $1,864 to their account in 2015. HSAs receiving employer contributions in 2015 received $948 on average.

Nearly 30% of employers offered an HSA-eligible health plan in 2015, and that percentage is expected to increase in the future both as a health plan option and as the only health plan option. The EBRI report notes that a survey by Mercer found that 25% of employers with 10-499 employees and 61% of employers with 500 or more employees offered an HSA-eligible health plan or HRA in 2016, while by 2019, 34% of employers with 10-499 employees and nearly three-fourths (72%) of employers with 500 or more employees say they are very likely to offer such a health plan. Indeed, is expected that 18% of employers with 500 or more workers will offer an HSA-eligible health plan or HRA as the only plan option by 2017.

Post a Comment

Your email is never published nor shared. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Send this to a friend