HSA Participants: Savers vs. Spenders

Average account contribution was more than $2,600 in 2010

By Stephen Miller, CEBS Mar 23, 2011

Not all participants in employer-provided health savings accounts (HSAs) use them the same way, according to benefits provider Fidelity Investments' analysis of the 74,000 HSAs that it administers.

Fidelity found that, on average, HSA participants had contributions of $2,620 made to their accounts in 2010, including their own and employer contributions. “The continuing rise of health care costs combined with health care reform really drove the adoption of HSA-qualified health plans by employers last year and thus the growth of HSAs,” said William Applegate, vice president, HSA products at Fidelity.

To contribute to an HSA, a participant must be enrolled in an HSA-qualified high-deductible health plan (HDHP). Unchanged from 2010, the 2011 HDHP minimum deductible amounts are $1,200 (individual coverage) and $2,400 (family coverage); see the SHRM Online article "2011 Limits Unchanged for HSAs and High-Deductible Plans."

Contribution and Spending Behavior

For approximately 17 percent of participants, their own and employer contributions to their accounts totaled more than $5,000 in 2010, and nearly half (46 percent) had contributions of $2,500 or more in 2010. The maximum contribution permitted by law in 2011 is $3,050 for individuals and $6,150 for families, unchanged from 2010.

In addition, Fidelity noted three categories of spending behaviors by HSA participants:

About a third (36 percent) of participants are “spenders,”using more than 90 percent of their annual HSA contribution on qualified medical expense reimbursements, allowing little or no balance to carry over.

40 percent of participants are “hybrids,” using between 10 percent and 90 percent of their HSA contributions and carrying over the rest.

Nearly a quarter (24 percent) of participants are “savers,” using less than 10 percent of their annual contributions and investing the balances for future health expenses.

Tax Benefits for Participants

HSAs allow participants to make pretax contributions via salary deferral, realize tax-free growth on their contributions, and make withdrawals for qualified medical expenses free of federal (and, in most cases, state) taxes.

Unlike flexible spending accounts (FSAs), HSA balances carry over from one year to the next without a use-it-or-lose-it concern, allowing participants to build up account balances to pay for future health costs, including those they are likely to confront during their retirement years.

Nearly all participants (95 percent) carried over some balance from year to year, in effect using the accounts not just to manage their current medical expenses but also as longer-term health care savings vehicles, according to Fidelity's research.

Stephen Miller, CEBS, is an online editor/manager for SHRM.​

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