Average 401(k) Balance Among HSA Participants More Than Double Non-Participants’

Also contributing to higher average account balances is a higher average deferral rate. HSA participants defer on average 8.9% of their annual salaries, the study found, compared with non-HSA participants who defer on average 8.2%. HSA participants are also more likely to increase their 401(k) deferrals, a trend that has continued for eight quarters, according to the study.  

Adding to higher balances among HSA participants compared with non-participants is a raised awareness of the magnitude of health care expenses in retirement, Applegate said.

“When companies roll out an HSA, a lot of education is needed,” he said. One of the elements that Fidelity sees a lot of companies using “is to begin educating people about the amount of money that they’re going to need to pay for health care in retirement. By introducing an HSA, you’re raising awareness with participants and, obviously, giving them a vehicle to begin saving.”

There are two trends in the HSA space that may be analogous to the automatic enrollment trend in the defined contribution world, Applegate added. “Increasingly, employers are making HSAs with a high-deductible health plan the only option for their employees,” he said, noting that 36% of participants that Fidelity supports work for companies that make HSAs the only choice for their workers.

“The other aspect is that roughly 80% of employers provide a contribution directly into employees’ accounts, and unlike a 401(k) where the employer contribution is typically done in the form of a match, for HSAs, most of our clients are making a direct contribution, regardless of whether or not the employee’s contributing,” according to Applegate.