The number of HSA accounts increased 16 percent year over year as of June 30, surpassing 21 million, according to a survey by consulting firm Devenir. Assets held in HSAs rose 23 percent, to $42.7 billion. As companies shift more health-care costs onto employees via plans with high deductibles, HSAs let workers put pretax dollars into savings accounts for medical expenses. They’re similar to flexible spending plans (FSAs) but without the annual “use it or lose it” requirement—contributions can roll over year after year. Any earnings increase tax-free, and the money isn’t taxed when used for qualified medical expenses. People who don’t use direct deposit at their job can contribute to an HSA but must wait until tax time to get money back by claiming a deduction.
Next year, eligible workers can contribute up to $3,450 to an HSA for an individual and $6,900 for a family. Workers 55 and older can kick in an extra $1,000 annually—and your company may contribute as well. In its poll of 100 top HSA providers, Devenir found employers give an average of $719 annually, for a total of 33 percent of all HSA dollars. Workers who contributed put in an average of $1,111 annually, with cash deposits far outweighing money put in any of the investment options that are also offered. (We can be forgiven for not fully funding HSAs—after all, many of us are trying to fully fund 401(k)s.)