Health savings account (HSA) assets hit a record in 2023, new data shows.
HSA assets surged to $123.3 billion last year, up nearly 19 percent from the previous record of $104 billion in 2022, according to an annual report by Devenir Group, an HSA research firm and investment consultant firm. Those funds were held in more than 37 million accounts—which marks a 5 percent jump year over year in the number of HSAs.
The report’s big finding of a significant jump in assets is a strong indicator of the popularity of the accounts, which have been embraced by more employers and employees in recent years.
The results “not only show robust growth in HSA assets but also project a strong, upward trajectory for the future, indicating a steady and significant expansion of the HSA market,” Jon Robb, senior vice president of research and technology at Devenir, said in a statement.
Meanwhile, a rebounded stock market helped bring total investment assets in HSAs to $46 billion in 2023, up 37 percent, the report found. Devenir surveyed HSA providers in early 2024; all data was requested for the period ending on Dec. 31, 2023.
The report also found that the number of HSAs that are investing continues to grow, although Devenir noted that the rapid growth seen over the past few years has slowed. About 2.9 million HSAs, representing nearly 8 percent of all accounts, have at least a portion of their HSA dollars invested.
Meanwhile, Devenir found that account holders contributed $50 billion to their accounts in 2023 (up 7 percent from the year prior) and withdrew $39 billion from their accounts during 2023 (up 13 percent from the year prior).
HSAs opened during 2023 had an average balance of $1,598 at the end of the year, compared to a $1,436 average balance at the end of 2022 for accounts opened in 2022.
Devenir’s year-end survey comes on the heels of another report from the Employee Benefit Research Institute, which in March found that employer involvement in HSAs has a positive effect on employees’ account success. HSA holders who received employer contributions had higher balances and were more likely to invest.
Industry experts say that more growth is expected in 2024.
Devenir currently projects that the HSA market will approach 44 million accounts by the end of 2026, holding $168 billion in assets.
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