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04/27/2017

PSCA Releases Results of First Ever HSA Snapshot Survey

April, 2017

The Plan Sponsor Council of America’s newly created HSA committee has released the results of their first ever snapshot survey designed to measure plan sponsors use of HSAs and their perceptions of HSAs as a retirement savings vehicle. The full survey is available at https://www.psca.org/survey_HSA_2017 and a summary of findings follows.

Benefits of the HSAThe majority (75.3 percent) of employers responding to the survey view the HSA as part of their retirement benefits strategy.  Nearly 60 percent of the respondents believe HSAs should replace Flexible Spending Accounts, and nearly three-fourths of employers think that HSAs should be open to all employees, not just those enrolled in a high-deductible health plan (HDHP). 

Eligibility and ParticipationBased on the employer responses, about 80 percent of employees are eligible to participate in the HSA, when offered by the employer. The average HSA account balance was $3,161. A little more than 40 percent of respondents indicate that 25 percent or fewer of their participants use up the entire HSA balance every year and an additional 35 percent of plans state that 26-50 percent of their participants use their entire balance every year. So, many employers participating in the survey do perceive the HSA to be a vehicle for employees to accumulate savings.  

Plan Design FeaturesMore than 80 percent of the employers reported contributing to the HSA, where two-thirds provide a set dollar amount based on the HDHP coverage tier. Many plans (40 percent) front-load contributions at the start of the year while 30 percent contribute each payday. More than half of the respondents reported covering the cost of HSA maintenance fees for active employees and 6 percent pay them for terminated employees.  Only 21 percent of surveyed employers are concerned about the fiduciary liability of sponsoring a HSA-HDHP.  

PSCA created the HSA committee in 2016 to focus on the role of Health Savings Accounts (HSAs) in employee retirement readiness, and evaluate and improve their integration with defined contribution retirement savings plans.  HSAs were a creation of the Medicare Modernization Act of 2003 and subsequent legislation contributed mightily to HSA growth. In 10 years, from 2006 to 2015, HSA assets grew from approximately $1.7 Billion to approximately $30.2 Billion.

“Absent legislative action that would curtail HSA tax preferences, HSA accounts are here to stay,” said PSCA Executive Director Tony Verheyen. “As HSAs continue to grow, look for PSCA to conduct additional HSA benchmarking surveys to track HSA trends and highlight HSA innovations.”