2023 Year-End Devenir HSA Research Report

Key Findings

Strong asset growth

Supported by stock market tailwinds, HSA assets saw record growth during 2023. Growth in the number of HSAs slowed. At the end of 2023, there were $123 billion in HSA assets held in over 37 million accounts, a year-over-year increase of 19% for assets and 5% for accounts.

HSA investment assets continue to rebound

After enduring one of the worst stock markets in decades during the first half of 2022, HSA investment assets have seen rapid growth. During 2023 HSA investment assets grew 37%, totaling $46 billion at the end of the year.

Growth of HSA accounts investing remains steady

The number of HSAs investing continues to grow but the rapid growth seen over the last few years has slowed. About 2.9 million HSAs, representing almost 8% of all accounts, have at least a portion of their HSA dollars invested.

Increase in withdrawal activity

Account holders contributed $50 billion to their accounts in 2023 (up 7% from the year prior) and withdrew $39 billion from their accounts during 2023 (up 13% from year prior).

Source: Devenir Research

HSA Industry Level Account Data

The pace of account growth continued to slow during 2023. There continues to be seasonality in the percentage of accounts that are unfunded. Accounts are often opened during the fall open enrollment season, but remain unfunded until early the following year. At the end of 2023, about 21% of all accounts were unfunded, unchanged from a year ago.

Source: Devenir Research

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. We believe that a contributing factor to the higher balance of new accounts in recent years was the reporting of M&A or account transfers from existing accounts as new accounts.

Source: Devenir Research

Industry Contributions & Withdrawals

Source: Devenir Research

Industry Contributions

The dominance of contributions made through employer channels in 2023 underscores the integral role of company-backed health benefits, while a smaller yet significant individual contribution segment suggests a growing awareness and personal responsibility in health savings.

Source: Devenir Research

Industry Withdrawals

Source: Devenir Research

Debit card transactions continued to be the dominant way account holders access their HSA funds in 2023.

Source: Devenir Research

2023 Withdrawal Methods Breakdown

Method	Average Number of Withdrawals Per Account	% Of Total Withdrawals (#)	Average Transaction Size
Debit Card	6.8	90%	$132
Check	0.1	1%	$625
Online Bill Pay	0.5	6%	$231
ATM	0.1	<1%	$129
Unknown	0.2	2%	$330

Note: Due to rounding, the above table may not total 100%.

HSA Investments

$46.4 billion estimated in HSA investment assets as of December 31^st, 2023, which is an increase of 37% year-over-year.
38% of all HSA assets are in investments as of December 31^st, 2023.
$19,212 average total balance (deposits and investments combined) for HSA investment accounts, 7.6 times larger than an average funded non-investment holder's account balance.

Source: Devenir Research

Looking Forward

HSA providers project HSA industry asset growth of 14% in 2024, while anticipating their own business will grow by 23% during the same period. Historically, HSA providers have been fairly accurate with their growth forecasts, demonstrating an impressive understanding of the outlook for their book of business. However, as a greater share of HSA assets are held in investments, market movement will make forward looking projections more difficult. 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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Report Methodology

The majority of this report was derived from the 2023 Year-End Devenir HSA Market Survey. The survey was carried out in early 2024 and all data was requested for the period ending on December 31st, 2023.

All estimates and projections reflect the current environment surrounding health savings accounts and do not contemplate any future regulatory changes to the market. Certain data points from the survey were omitted from this report due to inconclusive data or an incomplete sample set. All statistics are produced using the best available data set, which may at times produce statistics which do not reconcile, either with other statistics in this report or with previous reports.

Survey responses are self-reported by each HSA provider. When possible Devenir attempts to verify responses through a variety of channels, including but not limited to, press releases, annual reports, prior research, and FDIC filings.

About Devenir

Devenir is a national leader in providing customized investment solutions for HSAs and the consumer directed health care market. When health savings accounts first emerged in 2004, Devenir built its expertise around delivering cutting-edge investment solutions. As the consumer driven health care industry grew, so did Devenir's reputation as a leading researcher and award-winning investment consultant. Today, Devenir continues to lead the way in the rapidly growing HSA market. A research driven perspective makes Devenir the go-to investment advisor, HSA investment platform and consultant to employers, banks, third party administrators, health plans, and technology providers. Learn more at devenir.com.

Devenir Research Team

Jon Robb — Senior Vice President, Research & Technology
Eric Remjeske — President
Blake Jouwstra, CFA — Investment Analyst

© Devenir Group, LLC (Devenir). All Rights Reserved. Reproduction or redistribution of this report by any means is strictly prohibited. The information, data, analyses, and opinions presented herein do not constitute business or investment advice; are provided solely for informational purposes; and is not warranted to be correct, complete, or accurate. The opinions are expressed as of the date written and are subject to change without notice. Except as otherwise required by law, Devenir, shall not be responsible for any decisions, damages, or other losses resulting from, or related to, the information, data, analyses, or opinions or their use. The information contained herein is the proprietary property of Devenir and may not be reproduced or redistributed, in whole or in part, or used in any manner, without the prior written consent of Devenir.

For further information, please contact Devenir Research at 952-446-7400 or [email protected]