2024 Midyear Devenir HSA Research Report

Key Findings

Strong asset growth

Supported by stock market tailwinds, HSA assets saw continued strong growth during the first half of 2024. Growth in the number of HSAs continued. At the midyear point of 2024, there were $137 billion in HSA assets held in almost 38 million accounts, a year-over-year increase of 18% for assets and 5% for accounts.

Rapid growth in HSA investment assets

HSA investment assets saw continued rapid growth, driven by significant market returns during the first half of the year and increased recognition of HSAs’ long-term potential. During the first half of 2024, HSA investment assets grew 21%, totaling $56 billion at the midyear point.

Increase in HSA accounts investing

The number of HSAs investing continued to grow. About 3.2 million HSAs, representing almost 9% of all accounts, had at least a portion of their HSA dollars invested.

Slowing withdrawal activity

Account holders contributed $31 billion to their accounts in the first half of 2024 (up 6% from the year prior) and withdrew $20 billion from their accounts during the same period (down 2% from the year prior).

Source: Devenir Research

HSA Industry Level Account Data

The pace of account growth has continued to moderate, growing about 5% year-over-year. There continues to be some 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. Halfway through 2024, about 19% of all accounts were unfunded, up from 18% from a year ago.

Source: Devenir Research

A clear correlation is seen between account age and balance size. Funded accounts opened in 2004 have the highest average balance at $34,193, while those opened in 2024 average $1,885. This pattern holds consistently across the years, with a gradual decline in average balances for more recently opened accounts. The data demonstrates the cumulative effect of long-term HSA ownership, with older accounts benefiting from extended periods of potential contributions and possible investment growth.

Source: Devenir Research

Industry Contributions & Withdrawals

Source: Devenir Research

Industry Estimate of HSA Contributions and Withdrawal Activity for the period 1/1/2024 - 6/30/2024.

First Half 2024 Activity	Contributions	Withdrawals	Retained Assets
Estimated Industry Totals	$31,101,000,000	$20,411,000,000	$10,689,000,000

Industry Contributions

The dominance of contributions made through employer channels in the first half of 2024 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 2024.

Source: Devenir Research

First Half 2024 Withdrawal Methods Breakdown

Method	Average Number of Withdrawals Per Account	% Of Total Withdrawals (#)	Average Transaction Size
Debit Card	4.4	90%	$116
Check	0.1	1%	$502
Online Bill Pay	0.3	6%	$186
ATM	0.1	1%	$135
Unknown	0.2	2%	$343

Debit Card

Average Number of Withdrawals Per Account4.4

% Of Total Withdrawals (#)90%

Average Transaction Size$116

Check

Average Number of Withdrawals Per Account0.1

% Of Total Withdrawals (#)1%

Average Transaction Size$502

Online Bill Pay

Average Number of Withdrawals Per Account0.3

% Of Total Withdrawals (#)6%

Average Transaction Size$186

ATM

Average Number of Withdrawals Per Account0.1

% Of Total Withdrawals (#)1%

Average Transaction Size$135

Unknown

Average Number of Withdrawals Per Account0.2

% Of Total Withdrawals (#)2%

Average Transaction Size$343

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

HSA Investments

$56.2 billion estimated in HSA investment assets as of June 30th, 2024, which is an increase of 39% year-over-year.
41% of all HSA assets are in investments as of June 30^th, 2024.
$20,677 average total balance (deposits and investments combined) for HSA investment accounts, 8 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 16% in 2024 (up from 14% at the end of 2023), while anticipating their own business will grow by 25% during the same period (up from 23% at the end of 2023). Historically, HSA providers have been fairly accurate with their asset 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 asset projections more difficult.

For the first time, we asked HSA providers to project industry account growth as well. As of the midyear point, HSA providers anticipate we will see HSA account growth of 6.8%.

Devenir currently projects that the HSA market will grow to exceed 43 million accounts by the end of 2026, holding nearly $175 billion in assets.

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Report Methodology

The majority of this report was derived from the 2024 Midyear Devenir HSA Market Survey. The survey was carried out in early 2024 and all data was requested for the period ending on June 30^th, 2024.

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, Founder
Garrick Fults — 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]