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A New Look for HSAs – Retirement Savings

PSCA’s 2nd annual HSA survey finds design improvement amid continuing concerns.

Arlington, VA (August 20, 2020) – More than half of employers (51.5%) now position the Health Savings Account (HSA) as a retirement savings vehicle according to the Plan Sponsor Council of America’s second annual HSA benchmarking survey, sponsored by Empower Retirement, reinforcing the notion that HSAs can be a powerful retirement savings tool.

However, employers remain concerned about how to best explain HSA benefits to employees – employee education topped the list of HSA concerns for the second year in a row, though the percentage indicating so did drop five points this year to just more than half of respondents.  While the top education priority for nearly half of survey respondents is explaining the HSA tax preferences, 20 percent target contribution limits as the primary goal.

“While HSAs have been around for more than a decade and a half, employers and participants are only just coming to appreciate their power as an additional way to save for retirement,” said Jack Towarnicky, principal researcher for the American Retirement Association (ARA). “Employers need continued support in explaining the unique benefits of HSAs to employees – aligning it with their retirement savings programs rather than solely as a separate health benefit can help overcome some of these education barriers.”

Offering the same, or some of the same, investment options in the HSA program as in the 401(k) plan can help ease the education barrier around HSAs. However, only four percent of employers are currently doing so.  Among the 15% that would like to, provider capability (or lack thereof) is the primary reason they are unable to at this time. This is an opportunity for continued innovation with HSAs and retirement plan providers.   

“Employers and employees are still learning about the advantages of using HSAs as a retirement savings vehicle,” said Tina Wilson, Senior Vice President Chief Product Officer at Empower Retirement. “As healthcare costs continue to rise, we want to help employees understand the best way to use these healthcare savings accounts and to begin saving specifically for their healthcare expenses in retirement. Our challenge is helping workers understand that HSAs can be part of a multi-pronged retirement plan.”

Additional survey findings include:

  • The average participant contribution in 2019 was $2,595, the same as in 2018 while the average account balance at the end of 2019 was up slightly from a year ago, at $5,627
  • The vast majority of responding organizations (83.8%) offer investment options for HSA contributions, though more than 80 percent require a minimum balance of at least $1,000 to invest assets.
  • Nearly a third of organizations automatically enroll employees in the HSA if they enroll in the HSA-qualifying health option but fewer than ten percent of organizations use or suggest a default savings rate.
  • While education occurs primarily at open enrollment for the vast majority of respondents, a growing number are doing so at other times throughout the year.

About the Survey

The data reported is from 181 employers that offered an HSA-qualifying health option in 2019. The full report is available now

About the Plan Sponsor Council of America
The Plan Sponsor Council of America (PSCA), part of the American Retirement Association (ARA), is a diverse, collaborative community of employee benefit plan sponsors, working together on behalf of millions of employees to solve real problems, create positive change, and expand on the success of the employer-sponsored retirement system. With members representing employers of all sizes, we offer a forum for comprehensive dialogue. By sharing our collective knowledge and experience as plan sponsors, PSCA also serves as a resource to policymakers, the media, and other stakeholders as part of our commitment to improving retirement security for millions of Americans. For more information, visit

About Empower Retirement
Headquartered in metro Denver, Empower Retirement administers $679.8 billion in assets for more than 9.7 million retirement plan participants as of June 30, 2020.[1] It is the nation’s second-largest retirement plan recordkeeper by total participants. Empower serves all segments of the employer-sponsored retirement plan market: government 457 plans; small, midsize and large corporate 401 (k) clients; non-profit 403 (b) entities; private-label recordkeeping clients; and IRA customers. For more information please visit and connect with us on Facebook, Twitter, LinkedIn and Instagram.

[1] Information refers to the business of Great-West Life & Annuity Insurance Company and its subsidiaries, including Great-West Life & Annuity Insurance Company of New York and GWFS Equities, Inc. GWLA’s consolidated total assets under administration (AUA) were $679.8B. AUA is a non-GAAP measure and does not reflect the financial stability or strength of a company. GWLA’s statutory assets total $50.1B and liabilities total $48.8B. GWLANY statutory assets total $1.68B  and liabilities total $1.57B.


Hattie Greenan