HSA Market Projected to Exceed $60 Billion by 2020

Health savings accounts are projected to exceed $60 billion in assets among nearly 30 million accounts by the end of 2019, according to Devenir’s 14th semi-annual HSA survey of the top 100 providers in the market and follow-up research.

The report confirms that the HSA market is undergoing tremendous growth and it is only expected to get stronger. HSAs have grown to nearly $43 billion in assets and 21 million accounts as of June 30, 2017, representing a year-over-year increase of 23% for HSA assets and 16% for accounts.

In addition, HSA providers project industry asset growth of 21% in 2017, and estimate that their own businesses will grow by 25% during the same period. The report notes that health plan partnerships continued as the leading driver of new account growth, accounting for 36% of new accounts opened in 2017.

HSA Investments

HSA investments are also seeing substantial growth, up 44% for the year-over-year period of June 30, 2016 to June 30, 2017. Investment assets reached an estimated $6.8 billion in June, with 16% of all HSA assets in investments as of June 30, 2017. The 2017 year-end projection for investment assets is $7.3 billion, rising to nearly $12 billion for 2019.

Meanwhile, the average investment account holder has a $15,146 average total balance (deposit and investment account), six times larger than a non-investment holder’s average account balance, according to the report. Accounts opened earlier in the decade have also experienced significant growth. For accounts opened in 2005, the average balance as of June 30, 2017, was $8,432, compared to $3,847 for accounts opened in 2010.

In addition, the industry estimates $17.7 billion in industry contributions and $12.4 billion in withdrawals for the first six months of 2017, resulting in a 29% retention rate, which is relatively consistent with the three previous years, according to the data.

The 2017 year-to-date employer contributions estimate shows that 33% of all HSA dollars contributed to an account came from an employer, with the average employer contribution of $719. The year-to-date employee contribution estimate was 46% of all HSA dollars contributed to an account, with an average contribution of $1,111.

Devenir’s survey was conducted in July 2017, and consisted primarily of top 100 providers in the HSA market. All data was requested for the period ending on June 30, 2017.

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