HSAs at the midpoint of 2023: 4 key takeaways

Devenir Research recently released its 2023 mid-year report on Health Savings Accounts (HSAs).¹ This semi-annual survey measures key HSA variables like the number of accounts, total balances, invested balances, aggregate contributions and distributions, and sources of contributions. Here are four highlights of the state of HSAs in the first half of 2023:

1. HSA assets increased

Account assets increased year-over-year by 17% — with $116 billion in HSA assets held in nearly 36 million accounts. Growth in the overall number of accounts was just 6%, due to a slowing economy on employment. However, Devenir predicts the HSA market will exceed 40 million accounts by the end of 2025, holding more than $150 billion in assets.

2. HSA investment assets rose

Despite poor stock market conditions in early 2022, HSA investment assets grew 20% during the first half of 2023 — with a total of $40.5 billion at the end of June. That’s a year-over-year increase of 30%.

• 35% of all HSA assets were in investments.
• HSAs with investments had an average balance (deposits and investments) of $18,362 — more than seven times the average among all HSAs.

3. Slowed growth of accounts investing

The number of HSAs investing continues to grow, but slower than in previous years. Almost 2.7 million HSAs, representing 7% of all accounts, have at least some of their HSA dollars invested.

4. Strong contribution & withdrawals

Account holders contributed $29 billion to their accounts in the first half of 2023 — up 11% for 2022. And they withdrew $21 billion, up 16% from 2022.

HSAs opened during the first half of 2023 had an average balance of $1,143 — down from $1,464 at the midpoint of 2022, when there were more reports of M&A activity or account transfers from existing accounts as new accounts.

In the first half of 2023, the average contribution per funded account was $996 — of this total, 57% were employee contributions; 31% employer contributions. The remaining contributions came from IRA rollovers and other sources. In addition, 11% of all HSA dollars contributed came from an individual account not connected to an employer.

• Average employer contribution: $726²
• Average employee contribution: $1,327²
• Average individual contribution: $1,957²

Employers can amplify the power of HSAs

HSAs are uniquely positioned to help pay eligible short-term health care expenses today and help close the longer-term retirement health care savings gap. But employees need additional education and decision support around HSAs, according to our latest Voya Perspectives Orange Paper: Amplify the power of HSAs to boost health care savings — now and in retirement.³

Increasing HSA engagement starts with thoughtful program design.3 In addition, employers can consider implementing strategies and tools to help their employees enrolled in a high-deductible health plan (HDHP) better understand and maximize the financial benefits of HSAs to help spur both participation and optimization of their accounts.

Learn more about Voya’s HSAs and read the full Voya Perspectives Orange Paper: Amplify the power of HSAs to boost health care savings — now and in retirement.

Read HSA Paper

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• 7 tips for effective HSA program design
• Mythbusters: Dispelling common HSA myths