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A summary of the articles included in the October 2022 edition:
- HSA Contribution & Withdrawal Activity Rebounds During the First Half of 2022
- State-Level Trends in Employer-Sponsored Health Insurance, 2019-2021
- Tax Secrets of Health Savings Accounts
- Top 20 HSA Market Concentration – 2022 Midyear Update
- Morningstar’s Sixth Annual Health Savings Account Landscape
- Young Professionals Could Avoid Six Figures in Lifetime Taxes With an HSA
HSA Contribution & Withdrawal Activity Rebounds During the First Half of 2022
Devenir, a national leader in providing investment solutions for health savings accounts (HSAs), released today the results of its 24th semi-annual health savings account survey and resulting research report. Devenir found that there is about $100 billion saved in almost 34 million HSAs at the end of June 2022.
- Stock market headwinds stunt asset growth. Hindered by market headwinds, health savings accounts grew to $98.8 billion in assets held in almost 34 million accounts, a year-over-year increase of 6% for assets and 9% for health savings accounts for the period ending June 30th, 2022.
- HSA investment assets contract. With stocks seeing their worst first half of the year since 1970, HSA investment assets were down almost 10% from the end of 2021, totaling an estimated $31 billion at the end of June (up 2% from the year prior). On average, investment account holders held a $16,220 total balance (deposits and investments combined) at the end of June.
- More HSAs investing. Over 2.4 million health savings accounts have at least a portion of their HSA dollars invested, representing over 7% of all accounts.
- HSA contribution and withdrawal activity picks back up. Account holders contributed over $26 billion to their accounts in the first half of 2022 (up 11% from the year prior) and withdrew $18 billion from their accounts in the first half of 2022 (up 12% from year prior).
State-Level Trends in Employer-Sponsored Health Insurance, 2019-2021
This report considers how trends in employer-sponsored health insurance (ESI) coverage and cost have evolved over the past three years, since the pre-pandemic baseline (2019), since the first year of the pandemic (2020), and in 2021, as the country emerges from pandemic-related restrictions and economic dislocation. These analyses use estimates from the Medical Expenditure Panel Survey-Insurance Component (MEPS-IC), recently produced by the Agency for Healthcare Research and Quality (AHRQ).
Nationally, the share of employees enrolled in a high-deductible health plan (HDHP) was 55.7% in 2021, a 5.3 percentage point increase from 2020 (52.9%). An HDHP is defined as a plan that meets the minimum deductible amount required by the Internal Revenue Service (IRS) for Health Savings Account eligibility (e.g. $1,400 for an individual and $2,800 for a family in 2021).
Five states—Louisiana, Maine, New York, Tennessee, and Vermont—saw statistically significant increases in the share of employees enrolled in a HDHP, all of which had increases of at least 20 percentage points. Among those states that experienced increases, Maine saw the largest increase, rising to 76.2% in 2021 from 55.8% in 2020. Hawaii was the only state to experience a statistically significant decrease in the share of employees enrolled in a HDHP, falling to 11.6% 2021 from 17.6% in 2020.
Tax Secrets of Health Savings Accounts
Sure, HSAs can be used for medical expenses. But they can also be great rainy-day funds, retirement accounts that outstrip IRAs and 401(k)s, and tax-free accounts for twenty-somethings still on their parents’ health insurance.
Millions of Americans will soon face the daunting task of choosing health insurance for 2023. If you’re one of them, it pays to be aware of little-known benefits—and some pitfalls—of health savings accounts, known as HSAs.
Top 20 HSA Market Concentration – 2022 Midyear Update
In September 2020, Devenir published a blog post on HSA market concentration. At the time it was published, the HHI of the top 20 HSA providers was just under 1,000, signaling a competitive market. However, since then, there have been several acquisitions in the HSA market and as a result, Devenir wanted to recalculate the HHI using data from our 2022 Midyear HSA Research Report.
Morningstar’s Sixth Annual Health Savings Account Landscape
Morningstar published its sixth annual landscape study on HSAs available to individuals. The study finds assets in HSAs have grown at a 31% annualized growth rate over the past 15 years, and while the HSA industry has bettered its offerings in that time, several participants have room for improvement. The study evaluated 10 of the most prominent HSA providers’ offerings on two different use cases: as investment accounts to save for future medical expenses and as spending accounts to cover current medical costs.
Young Professionals Could Avoid Six Figures in Lifetime Taxes With an HSA
Running the numbers shows how health savings accounts could save one couple $160,000 in taxes. With open enrollment coming up, millions of workers should consider this tool’s benefits.
Too many young professionals are leaving Uncle Sam an enormous tax gratuity. How are they doing this? By not taking full advantage of the triple tax benefits of a health savings account. I’ve yet to meet anyone who wants to pay more taxes. Many do not mind paying their fair share, but they do not want to leave a tip.
An early to mid-career professional with a high-deductible health plan (HDHP) could be missing out on six figures of lifetime tax savings. With open enrollment for health insurance around the corner, it’s time to understand and utilize the benefits of your HSA.