Health Savings Accounts have no doubt grown in popularity in recent years as not only a way to fight rising healthcare costs, but also to leverage the most tax-advantaged tool out there.
Today, the TIAA Institute announced it has awarded Adam Leive the 27th annual Paul A. Samuelson Award for showcasing how HSAs can help consumers with both retirement savings and taxes.
Leive, who is also an assistant professor of public policy at the University of California, Berkeley, published researchtitled “Health Insurance Design Meets Saving Incentives: Consumer Responses to Complex Contracts.” It studies whether consumers use their HSAs as savings vehicles and how they impact health spending.
Leive’s research illustrated how many consumers don’t fully understand HSA features. In particular, HSA savings can be interchangeable with other savings, like retirement plans.
“Dr. Leive’s research gives us insight into consumer behavior that goes into why participants are choosing HSAs and how HSAs can contribute to their overall financial well-being,” said Surya Kolluri, head of the TIAA Institute. “The study also has implications for participants who choose HSAs as a means to offset how much money they spend from retirement accounts to pay for healthcare costs.”
“Consumers are increasingly responsible for making their own health insurance and saving decisions,” said Leive. “HSAs provide unparalleled incentives to save for lifetime health expenses. Few consumers, however, actually use HSAs in this manner, leaving substantial amounts of money on the table.”
James Choi, a professor of finance at Yale University and one of the 2022 Samuelson Award panel of distinguished judges, said Leive’s paper makes two important contributions. “On a personal finance level, it shows you’re probably using your HSA suboptimally,” Choi said. “Fortunately, the tax-minimizing strategy, while counterintuitive, is very easy to implement. And on a policy level, it suggests high-deductible health plans are not achieving their goal of reducing growth in healthcare costs.”
The Samuelson Award—named in honor of the Nobel Prize winner and former CREF trustee, Paul A. Samuelson—is presented annually by the TIAA Institute to recognize an outstanding research publication designed to increase Americans’ lifelong financial well-being. Winners are chosen by an independent panel of judges—consisting of Institute Fellows and previous award recipients—and receive a $10,000 cash prize. Past recipients include four Nobel laureates. Learn more about the TIAA Paul A. Samuelson Award here.
SEE ALSO:
• Who’s Leading in Health Savings Accounts?
• Cardin, Portman Honored for Strengthening American Retirement Security