By: Dennis Zuehlke, Compliance Manager, Ascensus.
Growth in health savings account (HSA) deposits continued at a rapid rate last year, with a 22 percent increase in assets from 2015 to 2016, according to the 2016 Year-End Devenir HSA Market Survey. HSAs now hold close to $37 billion in assets, based on data from the top 100 HSA providers that participated in the Devenir survey.
Employer Contributions & HSA Growth
The growth in HSA deposits is being driven in part by employer contributions. High-deductible health plan (HDHP) enrollees are frequently opening HSAs in part to take advantage of employer contributions. Employers initially made contributions to their employees’ HSAs as an incentive for employees to choose HDHPs over traditional medical plans. Even as HDHPs have increasingly become the only plan option for larger employers, most employers still make contributions to their employees’ HSAs. And, the percentage of employers making contributions, and the dollar amount of employer contributions continues to rise.
The 2016 Employee Benefits Research Institute (EBRI)/Greenwald & Associates Consumer Engagement in Health Care Survey found that 78 percent of HDHP enrollees reported that their employer contributed to their HSA, up from 67 percent in 2014. The survey also found that 20 percent of HDHP enrollees reported an employer HSA contribution of $2,000 or more in 2016, and 42 percent of HDHP enrollees reported an employer HSA contribution of $1,000 – $1,999 in 2016, up from 10 percent and 36 percent respectively in 2014.
The Devenir survey found that in 2016, employer contributions accounted for 26 percent and employee contributions accounted for 46 percent of all HSA contributions. Among employers making contributions, the average employer contribution was $868, and among employees making contributions, the average employee contribution was $1,786. The other 19 percent of all HSA contributions came from individuals and were made to accounts not associated with an employer. The average contribution made to these HSAs, for individuals making contributions, was $1,713, according to Devenir’s findings
Credit Unions Benefit from Offering HSAs to Members
Credit unions offering HSAs to their members are benefitting from strong HSA deposit growth, but HSA penetration in the credit union space is low, with credit unions hold less than 4 percent of all HSA assets, according to Devenir. If your credit union is not offering HSAs, opportunities abound both for your members and your credit union, as double-digit growth in both the number of HSAs and HSA deposits is expected to continue for the foreseeable future as more employers switch to HDHPs.
Learn more about this topic by listening to our recent podcast: “Not Offering HSAs? Your Credit Union is Missing a Chance to Grow”
Ascensus is the NAFCU Services Preferred Partner for IRA, Retirement Plan, and Health Savings Account (HSA) Solutions Software, Training, Documents and Consulting. To learn more about our partner, visit www.nafcu.org/Ascensus