HSA Balances Hit Record — But One Thing Is Falling Short

Average health savings account (HSA) balances hit a record high of $5,532 in 2024, according to a new analysis of the financial vehicles over the past 13 years by the Employee Benefit Research Institute (EBRI) — the highest amount recorded in EBRI’s HSA database and up from $4,747 in 2023. 

But there is a catch: Most accountholders are keeping their HSA balances in cash, rather than investing their assets — findings that indicate that employers may want to step up education efforts around the accounts.

That’s among the biggest takeaways from EBRI’s “Trends in Health Savings Account Balances, Contributions, Distributions, and Investments, 2011–2024” report, which examines more than a decade of HSA activity, including account balances, individual and employer contributions, distributions and investment behavior. The EBRI HSA Database contained 15.2 million accounts with $53.7 billion in total assets as of Dec. 31, 2024.

While the share of people using HSAs is rising, along with balances in the accounts, fewer than one in five accountholders (18%) invested their assets in 2024, the data found. Most instead are treating their accounts as a way to pay short-term expenses rather than saving and growing the funds.

But many benefit experts say investing HSA dollars is one of the biggest advantages of the accounts. Insiders tout HSAs as a smart way for employees to save for medical expenses, including in retirement, citing their triple tax benefits: Contributions are made pretax, the money in the accounts grows tax-free, and withdrawals for qualified medical expenses are also tax-free. 

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Though the number of investors is low, the percentage of HSA accountholders who invest has increased for eight consecutive years, an encouraging sign that accountholders are increasingly taking advantage of the investment opportunities and tax benefits HSAs offer, EBRI researchers said. Sixty-three percent of employers currently offer an HSA, according to the 2026 SHRM Employee Benefits Survey, up from 61% in 2025.

“What stands out from this long-term analysis is that people use their HSAs differently the longer they have their accounts,” said Paul Fronstin, director of health benefits research at EBRI. “The longer individuals have owned an HSA, the larger their balances tend to be, the more they tend to contribute, and the more likely they are to invest some of their assets rather than hold everything in cash. Those behaviors can help accountholders prepare not only for unexpected healthcare expenses today, but also for potentially significant healthcare costs in retirement.”

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Rising Healthcare Costs

While the amount in employees’ HSAs has hit a new high, it’s still important to note that healthcare costs are rising exponentially at the same time. EBRI researchers said that HSA balances are relatively low considering how high healthcare costs are — especially taking into account employees’ share. For instance, when year-end HSA balances hit $5,532 in 2024, out-of-pocket maximums for HSA-eligible health plans were $8,050 for individual coverage and $16,100 for family coverage.

The fact that employees are taking more money out of their HSAs to pay short-term expenses rather than saving the funds reflects what’s happening on a broader level regarding angst over rising health costs. Healthcare costs have even risen more in the past couple of years after the time period that EBRI analyzed.

Data from consulting firm Mercer finds that health benefit costs are on pace to increase 6.7% in 2026, pushing the average cost above $18,500 per employee, a 15-year high. And consulting firm Aon found that in 2026, employees are expected to pay an average of $5,297 for healthcare coverage, including payroll contributions ($3,130) and out-of-pocket expenses ($2,167).

Data from the Kaiser Family Foundation recently found that paying for healthcare is currently Americans’ top financial concern, with two-thirds of Americans saying they are very or somewhat worried about affording healthcare, outranking concerns about paying for groceries, utilities, or housing costs.

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Employer Implications

The data indicating that many employees are not utilizing HSAs for long-term health savings is perhaps more proof that employers offering HSAs need to improve education on the benefits and how to best take advantage of these accounts. Investing HSA funds, for instance, can allow funds to grow rather than sitting as cash.

“The biggest opportunity for HSAs is closing the education gap at scale,” Shobin Uralil, cofounder and chief operating officer of Lively in New York City, told SHRM recently. Employers should “proactively educate employees on how HSAs work, from contributions and investments to long-term savings,” he said.