The majority of consumers are using their health savings accounts as an alternative checking account and not an investment account, according to an Employee Benefit Research Institute brief.
EBRI researchers combed its database of 5.5 million accounts worth $11.4 billion as of Dec. 31, 2016, to examine HSA trends. Study authors analyzed account balances, individual and employer contributions, investments and account-owner information between 2011 and 2016.
Here are four findings.
1. While HSAs offer a tax incentive for contributors, most account holders are using HSAs to pay for deductibles, coinsurance and copayments instead of contributing the maximum tax-free amount and letting some funds roll over year-over-year.
2. Average total contributions to HSAs grew from $2,348 to $2,922 from 2011 to 2016. This includes individual and employer contributions.
3. Sixty-three percent of HSA holders withdrew funds, with an average $1,771 deducted in 2016. This implies an average rollover of $1,151, the report states.
4. Individuals who opened their account in 2005 contributed an average $3,658 to their HSA annually, compared to $1,290 for those who opened HSAs in 2016. This shows longer experience with contributing to HSAs can improve account holders' financial security, researchers said.