5 Interesting Tidbits from Devenir’s Annual HSA Report

Save money today. Build savings tomorrow. Invest funds. There’s so much that participants can do with their health savings account (HSA). Devenir’s annual year-end HSA report provides an opportunity for a closer look at HSA participant behavior in the past year. And the past year has been unlike any other due to COVID-19. What interesting HSA trends emerged in Devenir’s report during 2020?

HSA assets beat projections

In addition to providing past data, Devenir’s report also projects HSA assets (deposits and investments) for the next three years. In the 2019 year-end report, Devenir projected HSA assets of $77.4 billion for 2020. However, the actual number for 2020 in the just-released report is $82.2 billion, which is a 25 percent increase over the $65.9 billion in HSA assets in 2019. 

Investment assets are booming

For the second year in a row, HSA investment assets increased by more than 50 percent from the previous year. The 2020 increase of 52 percent puts HSA assets at $23.8 billion, which comes after an increase of 54 percent in 2019.

Those who do invest their HSA funds have much larger HSA balances than their non-investor counterparts. And the gap is widening. HSA investors have an average balance of $17,926 (in investment and cash accounts), which is 6.5 times more than those who fund only a cash account. 

Number of HSAs that are investing is also growing

In 2020, about 1.7 million HSAs were investing funds, which is an increase of 42 percent from the 1.2 million accounts with investment balances in 2019. Almost 6 percent of HSAs now invest funds. 

Higher share of $5,000-plus balances

All HSA funds carry over from year to year, which is one reason these accounts are ideal for retirement planning. The share of HSAs with balances of at least $5,000 increased to 14 percent of all HSAs in 2020. That’s a jump from 2019, when 11 percent of HSAs had a balance that high. 

Individual HSA contributions are climbing

Anyone can contribute to an HSA if they meet an HSA’s eligibility criteria, even if their employer doesn’t offer one. 12 percent of HSA contributions in 2020 were into accounts not associated with an employer. And the amount those participants contributed was an average of $2,033, which was an increase of nearly $200 from 2019 (when it was $1,841). 

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The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own counsel.