Health savings accounts eclipsed $100 billion by the end of January, according to Devenir, an HSA investment consultant, as more consumers use the tax-advantaged accounts to save for future health costs.
The firm forecasts HSA funds will hit $150 billion by the end of 2024.
“The growth is really accelerating in HSA assets,” said Jon Robb, senior VP of research and technology at Devenir.
Consumers had about 32 million total HSAs by the end of 2021, an annual increase of 8%, according to a semiannual study published by the consulting firm.
Assets had grown to $98 billion as of Dec. 31, 2021, up 19% from the prior year, and hit $100.7 billion as of Jan. 31.
Companies began adopting high-deductible health insurance plans for their workers more regularly over the past decade, Robb said. They help organizations save money by shifting more costs onto employees. These plans carry a lower monthly premium for consumers, but leave them on the hook for larger out-of-pocket bills before cost-sharing components kick in.
However, just 7% of all accounts have some of their money invested in mutual funds or other investments — suggesting most consumers use HSAs as a spending rather than savings account.
“A lot of people don’t have the ability to pay for things out of pocket and hold onto the receipt,” Robb said.
“It’s still a small percentage that are investing,” he added. “That number has been growing rapidly over the last few years.”