HSA availability and usage continue to grow, according to the Plan Sponsor Council of America (PSCA). For their 2022 HSA Survey, the PSCA surveyed nearly 500 employers who offered HSA-qualifying health plans in 2021. Their findings are summarized and highlighted below.
Data Highlights from the PSCA 2022 HSA Survey
- $2,483 — average participant contribution (2021)
- $4,924 — average account balance (2021)
- 75% of employers make contributions
- More than half of the employers cover HSA account maintenance fees
- More than 40% automatically enroll for HSA-qualifying health plans
- 60% of respondent companies offer investment options
- Less than 30% of employers positioned HSAs as retirement savings tools
- More than 20% of participants invested some portion of their balance
- Nearly 70% of respondents say employee education is a top or primary concern
- The leading education priority is explaining HSA tax preferences, followed by the contribution limit
HSA Contributions and Balances
Average participant contributions and balances have declined. PSCA found that of the 75% of employers who contribute, 60.2% set different amounts based on plan coverage levels, i.e., single coverage versus family coverage. Employer contributions remained the same in 2021 as in 2020 for 96.8% of respondents, despite COVID. In addition, 85.1% of employers kept them the same again in 2022, and more than 10% increased contributions.
More than 20% of participants invest their assets, but 61% of organizations offer investment options. Most of these organizations set a minimum investment threshold of $1,000 or higher. With the average account balance nearing $5,000, investment opportunities exist, but many account holders are still missing out.
Fewer than 30% of employers positioned HSAs as retirement tools, so many participants may have yet to realize this option. And finally, HSAs are prone to misunderstandings or important details that can be hard to remember without ongoing reminders, which brings us to education.
HSAs can be practical tools for savings and retirement, but only if participants understand what they do and know how they work. Of those surveyed by the PSCA, 61% primarily educate employees on HSAs during their annual open enrollment, with 20% doing so year-round.
The top three educational goals are HSA tax benefits (78.4%), contribution limits (35%), and HSA-eligible health care plan details. Further, only 30% of surveyed employers indicated that they promote HSAs as part of a retirement savings strategy, with another 9.2% planning to do so.
As employers work to reduce costs, more embrace HSA-eligible, high-deductible health plans (HDHPs) in response to the lower premium costs. In addition, HSA plans are popular with millennials, who are typically healthier and incur fewer medical expenses.
During open enrollment, it’s vital for employers to provide employees with a complete picture of how benefits can help them. Once enrollment is complete, however, various details are forgotten. Ongoing, year-round reminders can help increase usage and satisfaction among account owners and their dependents.
Benefits education materials should meet various technological comfort levels. For example, older employees often prefer print materials and in-person interaction. On the other hand, younger generations typically respond better to online resources, social media, and engaging videos.
Adoption and satisfactory usage hinge on employee understanding of their benefits and how to utilize them most effectively. Making that education easy to understand and available year-round is paramount for employers. For more information on creating or elevating a benefits education plan, check out “Help Employees Understand Their Benefits.”
DataPath, Inc. offers flexible, cloud-based HSA management software solutions.