Making the case for employer HSA contributions

by Tom Torre | Originally posted on BenefitsPro

Employers continue to drive HSA growth while reaping win-win benefits—and changing the landscape of 401(k) contributions.

As the health savings account market continues to grow, so does the conversation around HSA contributions.

More and more employees are discovering their HSA’s unique ability to be leveraged as an additional retirement savings vehicle. And more employers are maximizing their HSA program impact by choosing to contribute to employee HSAs.

Employer contributions rise, unfunded HSAs fall

The latest Devenir HSA market research shows employers continuing to drive strong HSA growth through contributions to employee accounts.

In January 2021, 34% of HSAs received an employer contribution, with employer contributions representing 60% of all incoming HSA funds throughout the month. The average employer contribution checked in at $502.

Unsurprisingly, as the number of HSAs receiving employer contributions rose, the number of unfunded HSAs fell, with fewer than 18% of all HSAs being unfunded by the end of January 2021.