HSA assets surpass $60 billion

Health savings accounts keep on growing.

The number of HSAs now exceeds 26 million, holding an estimated $61.7 billion in assets halfway through 2019, according to new data out from research firm Devenir. That’s a year-over-year increase of 12% for accounts and 20% for HSA assets for the period ending June 30.

Account holders contributed over $22 billion to their accounts in the first six months of 2019, up 12% from the year prior.

Devenir’s survey data was collected in July from 100 HSA providers in the health savings account market.

“The year-over-year growth that we’re seeing in health savings accounts is a clear sign that consumers want to take control of their healthcare options,” says Shobin Uralil, co-founder and chief operating officer of HSA company Lively. “It gives more [employees] the opportunity to save tax-free money for healthcare expenses while also allowing employers to offer more desirable and cost-effective healthcare options for their employees.”

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Investments are also being propelled by more employees “being aware of their healthcare costs in retirement,” says Jon Robb, senior vice president of research and technology at Devenir.

Indeed, more employees are beefing up their HSAs as a way to help offset medical costs in retirement. This is becoming a focus as medical costs during retirement continue to increase. For instance, a 65-year-old couple retiring this year will spend $285,000 on medical expenses throughout their retirement, according to Fidelity Investments’ annual healthcare cost estimates.

See also: What Are We Doing About Ridiculous Healthcare Costs?

Experts say the HSA is a particularly helpful retirement vehicle because of its tax benefits. Unlike some other retirement programs, like the 401(k), HSAs aren’t taxed.

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See also: Industry Groups Praise HSA Expansion for Chronic Conditions

Devenir projects that the market will approach $88 billion in HSA assets, held by more than 30 million accounts, by the end of 2021.

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Kathryn Mayer
Kathryn Mayer is HRE’s former benefits editor and chair of the Health & Benefits Leadership Conference. She has covered benefits for the better part of a decade, and her stories have won multiple awards, including a Jesse H. Neal Award and honors from the American Society of Business Publication Editors and the National Federation of Press Women. She holds bachelor’s and master’s degrees from the University of Denver.