HSA Balances Rose in 2025

Employees are putting away more money in their health savings accounts (HSAs) as health care costs continue to rise. 

New data from HSA provider Lively found that the average account balance for the company’s clients was $5,457 in 2025, up from an average of $4,923 last year. That’s a year-over-year increase of 11%. 

The findings highlight how employees are increasingly using HSAs as a financial buffer — especially as both health care costs and financial stress increases — and come as expanded HSA eligibility takes effect in 2026. 

“HSA growth this year has been fueled by higher participation and a clear shift in how employees use their accounts,” said Shobin Uralil, cofounder and chief operating officer of Lively in New York City. “Investment assets continue to rise as more employees view HSAs as long-term savings vehicles, not just short-term spending accounts.”  

Health care costs have been on an upward trend, with data from consulting firm Mercer suggesting they might hit a 15-year high in 2026. Meanwhile, health care costs estimates for retirement have also grown, with Fidelity Investments finding that a 65-year-old retiring in 2025 can expect to spend an average of $172,500 in health care and medical expenses throughout retirement. 

Many industry experts 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. More than 60% of employers offer an HSA, according to the 2025 SHRM Employee Benefits Survey. 

Specialty Credential: Total Rewards 

Education Gap 

But employers offering HSAs need to improve education on these benefits, and how to best take advantage of these accounts. 

“Employers need to do a much better job helping employees understand how to best manage and use their HSA to maximize their dollars,” Larry Maistelman, a health and welfare consultant at Grand Forks, N.D.-based financial services firm Alerus, said last summer at SHRM25 in San Diego, adding that companies can involve their 401(k) providers to help educate employees about HSA investing. 

Uralil agreed. 

“The biggest opportunity for HSAs this year is closing the education gap at scale,” he said. 

Employers should “proactively educate employees on how HSAs work, from contributions and investments to long-term savings,” Uralil said.  

Toolkit: Essential Health Care Cost Management Strategies 

HSA Changes 

Several changes have been made to HSAs that industry experts expect will expand the HSA footprint and impact employers and their health care benefits. The modifications made to HSAs were part of the One Big, Beautiful Bill that was signed into law July 4, with changes taking effect Jan. 1. 

Now, more individuals qualify for an HSA based on their health plan type. Those enrolled in a bronze or catastrophic Affordable Care Act health plan meet the primary coverage requirement for HSA eligibility under the new law. 

Also in a change that began Jan. 1, an otherwise eligible individual enrolled in certain direct primary care (DPC) service arrangements may contribute to an HSA. In addition, they may use their HSA funds tax-free to pay periodic DPC fees. Individuals enrolled in high-deductible health plans who participate in certain direct primary care benefits can now pay DPC fees from their HSAs if their monthly fees are $150 or less, or $300 or less for family coverage. 

Another change is a permanent safe harbor provision allowing HSA holders to receive telehealth and other remote care services before meeting their deductible, while remaining eligible to contribute to an HSA. That change is retroactive, effective for plan years beginning on or after Jan. 1, 2025.