The number of health savings accounts in the U.S. now exceeds 30 million, holding an estimated $82.2 billion in assets at the end of 2020, according the latest HSA report from Devenir.
“Despite the COVID-19 pandemic, a record $42 billion was contributed to health savings accounts during 2020. Account holders were able to tap their health savings accounts to help cover over $30 billion in medical expenses throughout the difficult year, while continuing to accumulate meaningful savings for future medical expenses,” said Jon Robb, SVP of research and technology at Devenir, a national leader in providing investment solutions for HSAs.
Devenir’s 21st semi-annual health savings account survey data was primarily collected in January of 2021 and largely consisted of top 100 HSA providers, with all data being collected for the period ending on December 31, 2020.
Key findings from the survey and resulting research report:
- Robust HSA asset growth. Health savings account asset growth remained strong, increasing to $82.2 billion in assets held in over 30 million accounts, a year-over-year increase of 25% for assets and 6% for health savings accounts for the period ended December 31, 2020.
- HSA investment asset growth soars. Fueled by strong market gains in the second half of 2020, HSA investment assets soared to an estimated $23.8 billion at the end of December, up 52% year-over-year. On average, investment account holders hold a $17,926 total balance (deposits and investments combined). Non-investor HSAs average $2,737.
- Interest in HSA investing grows. There are now approximately 1.7 million accounts that are investing a portion of their HSA dollars, representing almost 6% of all accounts.
- HSA contribution growth outpaces withdrawals. Account holders contributed almost $42 billion to their accounts in 2020 (up 8% from year prior) and withdrew over $30 billion from their accounts in 2020 (up 4% from year prior). Nearly half (49%) of account holders contributed more than they withdrew in 2020.
“We are encouraged by the momentum HSA investing gained in 2020, as a record 7% of funded accounts hold investments,” said Zach Haas, VP, Investment Analyst at Devenir.
When it comes to where HSA account contributions come from, the report reveals 26% of all HSA dollars contributed to an account came from an employer (for employers making contributions, average was $870); 59% came from an employee (average employee contribution was $2,054); 12% of all HSA dollars contributed to an account came from an individual account not associated with an employer (average individual contribution was $2,033).
Devenir currently projects that the HSA market will exceed 36 million accounts by the end of 2023, holding over $127 billion in assets. Notably, 54% of accounts have been opened in the last 3 years, and 38% of assets are held by accounts opened in the last 3 years.
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