Most employees who use health savings accounts as an investment vehicle keep the money in cash, while overall investing remains a modest component, according to a survey conducted by the Plan Sponsor Council of America.
For 2022, the average percentage invested in something other than cash was 27.8%, not much different from the 27% in 2021 or the 28.7% in 2020, the annual surveys showed.
During this three-year period, the percentage of participants using HSAs for investments remained fairly stable: 18.7% in 2022, 21.5% in 2021 and 19.3% in 2020.
Last year, 60% of respondents said they offered investment options for their HSAs – the same percentage as 2021.
Among those employers offering investment options, 78.1% required minimum account balances of $1,000 or more before employees could invest their HSA dollars.
The latest PSCA survey covered 529 employers that offered an HSA, up from 464 in the previous year's survey.
A majority of respondents — 54.8% — had 199 or fewer employees, while 24.2% had 200 to 999 employees. Twenty-one percent had 1,000 or more employees.
HSAs are available to participants in high-deductible health plans offered by employers. They provide a triple tax advantage. Contributions are made with pretax dollars, investment gains within HSAs are tax free and withdrawals from HSAs are tax free for qualified medical expenses. The money can be carried over year to year.
