While health savings accounts participants see them as an important part of their medical insurance strategy, participants do not see them as vehicles for tax-savings or adding to their retirement accounts, according to a report by Alegeus.
The 2018 Alegeus HSA Participant Profile found that only 11% of respondents capitalize on the full tax benefits by contributing the maximum amount allowed by the IRS, and only 13% have invested their HSA savings for growth.
Given the magnitude of healthcare costs, consumers will face this year and in retirement, most HSA participants still underfund their accounts. HSA participants appear to use them to pay down their health plan’s deductibles instead of using the funds for retirement.
“As an industry, we must continue to emphasize the importance of saving for the future and empower HSA participants to unlock the full tax advantage of these accounts,” says Steven Auerbach, CEO of Alegius.
Although many participants are not funding their HSAs to the maximum amount, users are 38% more confident in understanding their health insurance coverage and 54% more confident in forecasting out-of-pocket healthcare costs. They are also 23% more likely to make value-based decisions than the general population that do not participate in HSAs.
Health savings account holders do more pre-purchase diligence; reporting that 46% are more likely to research and compare costs and 37% more likely to seek out alternative forms of treatment.
These enrollees also show more discipline when saving for their future over their peers. At least 68% are more likely to have a savings goal and 80% more likely to save aggressively for future healthcare costs.