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20 years of HSAs

HSA Day 2023: Celebrating 20 years of HSAs

October 4, 2023

The 20th anniversary of health savings accounts (HSAs) marks a significant milestone for these accounts, which have empowered tens of millions of Americans to save for both immediate and future medical expenses. As we celebrate this anniversary on HSA Day 2023, it is clear that HSAs have become an integral part of the employee benefits landscape. 

Keep reading to learn more about the growth of HSAs over the past 20 years, HSA misconceptions that still exist, and our predictions for how HSAs will continue to evolve in the future. And check out our HSA Day 2023 Benefits podcast episode with Chris Byrd, senior vice president health executive at WEX, below.

Growth of HSAs

HSA assets have increased at an annual rate of over 16 percent in the past three years and reached $104 billion by the end of 2022, according to the 2022 Year-End Devenir HSA Research Report.

“Out-of-pocket expenses have been cited by individuals as the biggest barrier to seeking healthcare … the reason why health savings accounts have proven so popular and why they continue to grow is because they can really help people manage this challenge in two ways,” said Byrd on our Benefits podcast. “First, by giving them a way to save small amounts out of their payroll to make sure they have money there when they need it, and second to lower their costs through the tax savings of an HSA.”

Participants are increasingly recognizing how they can use their HSAs differently throughout various life stages. Through looking at our own WEX HSA data pool, we’ve identified seven distinct profiles of HSA account owners, ranging from beginners to spenders to investors, with people often transitioning from one area to another as time progresses.

Recent HSA trends

Recent HSA trends have revealed a need to focus on educating the consumer about HSAs and personalizing HSAs. Our recent WEX participant survey showed that HSAs were the top benefit employees want more education on, with another survey noting only 34 percent of traditional plan participants said they’re familiar with consumer-driven health care. 

With personalizing HSAs, the aim is to educate employees by tailoring messages to their specific life stages and needs. For example, personalized outreach through our My HSA Planner tool at WEX resulted in a 22 percent increase in participant usage and a contribution of an additional $470 annually to their HSAs.

HSA misconceptions still exist

Despite existing for two decades, numerous misconceptions continue to surround HSAs and their rules. Make sure HSA participants understand that:

  • HSAs are employee-owned
  • HSAs are not use-or-lose accounts
  • HSAs are not only for the wealthy 
  • HSAs are not exclusively a retirement account
  • HSAs are great for individuals who are young and healthy

Byrd says the existence of these misconceptions are due partially to a lack of effective education and outreach efforts, as well as a need for more personalized approaches that address individual needs and help employees better understand HSAs.

HSA communication and education methods

To effectively communicate and educate employees about HSAs, it’s important to simplify the language used, focusing on terms like “safety net,” “security blanket,” “control,” and “value” instead of technical jargon. Open enrollment is a great opportunity for this communication, allowing employers to personalize the message to each employee’s needs. 

Additionally, employers can significantly encourage HSA participation by contributing to their employees’ accounts, according to 2022 data from the WEX benefits platform. Even a $50 employer contribution can encourage participation, with larger contributions of $1,500 to $1,750 for family coverage and $750 to $1,000 for individuals resulting in the highest employee contributions.

Future of HSAs

Byrd believes the future of HSAs will evolve around better aligning with individuals’ healthcare needs. He sees HSA adoption and usage continuing to be on the rise through improved education and relevant messaging, along with more comprehensive coverage amongst rising medical costs and increased flexibility in plan design.

AI and data analytics are also likely to play an important role in optimizing HSA management, allowing individuals to make more informed decisions about their healthcare spending. For example, WEX’s consumer pathways program is built on generative AI and uses personalization and targeted relevant messaging combined with predictive analytics to educate employees on HSAs and encourage them to engage with their account. Learn more about consumer pathways below: 

HSA Day 2023 resources

As we celebrate HSA Day 2023, keep in mind that it’s a day to learn about the value HSAs can bring to your employees and encourage employees to enroll and fully utilize their HSA. 

“HSAs are a consumer product and we need to be promoting it to the consumer,” said Byrd on our podcast. “HSA Day is a really important opportunity, whether you are a custodian, an administrator, a broker, an employer, or anyone else in the industry, to get the word out about HSAs in whatever way works best for you.”

Explore our wide variety of HSA tools designed to improve your HSA knowledge and offer high-quality resources for your employees. Discover some of our top HSA resources below:

Connect with us on social media to access even more #HSADay content, including HSA tips, resources, and inspiring stories. And don’t miss out on our HSA Day page to learn more about the advantages of an HSA!

The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own legal counsel, tax and investment advisers. 

WEX receives compensation from some of the merchants identified in its blog posts. By linking to these products, WEX is not endorsing these products. 

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