What You Need to Know
- Lower contributions could reflect pandemic-related employment concerns, and distribution declines may owe to fewer people seeking routine medical care, the study said.
- Few account owners venture beyond cash to invest their HSA balance; many accounts are new and lack the required minimum.
- As account owners become more familiar with HSAs, they use them more as designed, EBRI’s Paul Fronstin said.
Health savings account balances increased by a modest $400 between 2019 and 2020, the Employee Benefit Research Institute reported this week. But average annual contributions fell 2% from an all-time high of $2,041 to $1,995, and average annual distributions plummeted to a record low of $1,714.
EBRI noted that lower HSA contributions could reflect pandemic-related employment concerns, and distribution declines may owe to fewer people seeking routine medical care during the pandemic.
The report is the fifth in a series of longitudinal studies from EBRI’s HSA Database that examine trends in account balances, individual and employer contributions, distributions, invested assets and account-owner demographics from 2011 to 2020.
The HSA Database contained 11.4 million accounts with total assets of $32.9 billion as of Dec. 31. Balances were measured at year end. Contributions and distributions were aggregated across each year.
The new report found that few account owners venture beyond cash to invest their HSA balance. In 2020, 9% of accounts were investing, up from 2% in 2011. The research showed that the longer an account is open, the likelier it will have investment.