Building Healthy Futures

Transcription

1 Building Healthy Futures

2 What is a health savings account (HSA)? The HSA is a type of tax-advantaged medical savings account Individuals who are covered under $3,450 to a maximum amount each year limited $6,900 An HSA is used to pay for current and future qualified medical expenses Earnings accumulate tax-free, and withdrawals for qualified medical expenses are also tax-free.* $1,000 there is no penalty to use HSA money PAGE 2

3 Executive Summary In this year s report, we will explore key insights on behavioral trends across these key areas. Adoption and contribution HSA adoption continues to increase as more employers offer HDHPs. Continuous account holders People who stick with their HSAs over the course of five years tend to accumulate higher balances. HSA investing behaviors People who save more of their balance are more likely to invest, but most accounts remain in cash. Generational insights There are generational differences in saving and spending trends. HSAs and DC savings HSA account holders are more likely to increase their 401(k) contribution. Resources for employees Videos, articles, and infographics to help employees. Click to explore each key area. PAGE 3

4 ADOPTION AND CONTRIBUTIONS HSA adoption is much higher when an HSA-eligible plan is the only option. HSA adoption rates by generation 49% 49% 46% 40% Non-exclusive: represents employees who have a choice between 21% 23% 26% 26% 24% 25% 23% 21% two or more health plans at work. Full replacement: represents employees who have access to only an HSA-eligible plan at work. Millennial Gen X Boomer Overall All: represents all plans offering an HSA (includes non-exclusive and full replacement). ( ) ( ) ( ) PAGE 4

5 ADOPTION AND CONTRIBUTIONS A rapid increase in new accounts (with no accumulated balances) has resulted in the average account balance remaining flat over the past few years. Average HSA account balance $3,376 $3,510 $3,468 $3,114 $3, PAGE 5 Adoption rates of HSAs are at 25%, up two percentage points from

6 ADOPTION AND CONTRIBUTIONS Account holders across all plan types could be contributing more. $7,750 $6,750 On average, most people are contributing less than half of what they could be to their HSA. $3,807 $4,400 $3,996 $3,400 $1,808 $2, contribution limits 2017 average employee + employer contributions Individual Family Individual plus catch-up Family plus catch-up PAGE 6

7 ADOPTION AND CONTRIBUTIONS Average HSA contribution tends to be higher when a 401(k) match is offered. $3,179 $3,348 $2,601 Average HSA contribution (overall) Average HSA contribution (with 401(k) match) Average HSA contribution (no 401(k) match) PAGE 7

8 CONTINUOUS ACCOUNT HOLDERS There are five types of account holders when analyzing HSA spending and saving habits over the past five years. Distribution of five-year continuous account holders, by saving/spending behavior 55% Consistent savers Partial savers Mix: Partial spenders Consistent spenders Mix Most people move between spending and saving, year over year. PAGE 8 Data based on 65K Fidelity HSA continuous account holders, between

9 CONTINUOUS ACCOUNT HOLDERS Those who contribute to HSAs consistently have experienced larger increases over time, even when switching between saving and spending. Continuous HSA Account Holder Balances ( ) $13,856 Consistent savers saved 90% or more of contributions every year for five years from Mix: switched among savers, spenders, and hybrids year over year. $5,448 $2,260 $2,547 $1,451 $1,037 $100 $ Consistent hybrids spent between 10% and 90% of contributions every year for five years from Consistent spenders spent 90% or more of contributions every year for five years from Over five years, even those who fluctuate between spending and saving in an HSA (the Mix segment) have seen their accounts grow by over 3.5X Data based on 65K Fidelity HSA five-year continuous account holders, and their year-end balances for each of the past five years, between PAGE 9

10 HSA INVESTING BEHAVIORS HSA account holders have different investing habits based on saving and spending behavior in their HSAs. Savers are much more likely to invest in their HSA, while spenders tend to keep assets in cash. Percent of HSA Accounts Percent of HSA Assets 45% 55% Saver/ Leaning Saver 48% 52% 17% 83% Mix 29% 71% 4% 96% Spender/ Leaning Spender 12% 88% 8% 92% Overall 25% 75% Invested Cash only Non-Cash Cash PAGE 10

11 GENERATIONAL INSIGHTS Behavioral differences in HSAs by generation Millennials Gen X Boomers 18% of Millennials making less than $100K/year have adopted an HSA, higher than their Gen X/Boomer counterparts. Gen X has the biggest percentage of spenders, but Boomers withdraw the most dollars annually from the HSA. Despite concerns about paying for health care in retirement, 1 in 4 Boomers saved 90% of their contributions in Average age Average income $84,020 $127,606 $136,965 Plan type (family individual) 39% 61% 72% 28% 66% 34% Average contribution amount $1,650 $2,670 $3,204 (employee + employer) + $804 + $987 + $949 Total contribution $2,454 $3,657 $4,153 Average withdrawal amount $1,191 $2,159 $2,202 Average HSA account balance $2,059 $3,833 $5,699 PAGE 11 Averages based on 2017 account activity.

12 GENERATIONAL INSIGHTS Gen X has the highest percentage of HSA assets invested. % HSA Accounts % HSA Assets 7% 93% Millennial 20% 80% 8% 92% Gen X 26% 74% 8% 92% Baby Boomer 24% 76% Invested Cash only Non-Cash Cash PAGE 12

13 HSA/DC SAVINGS Those who save in a 401(k) and contribute to an HSA plan tend to contribute more to their 401(k). Average 401(k) deferral rates by age 13% 12% 9% 10% 9% 11% 9% 7% HSA + 401(k) 401(k) only PAGE 13

14 HSA/DC SAVINGS Across all income levels, those who save in a 401(k) and contribute to an HSA tend to have higher 401(k) deferral rates. Average 401(k) Deferral Rates by Income 14% 14% 12% 12% 12% 10% 11% 11% 8% 8% 9% 8% 9% 8% 6% 7% $20K-$40K $40K-$60K $60K-$80K $80K-$100K $100K-$150K $150K-$250K >$250K OVERALL HSA/401(k) 401(k) PAGE 14

15 HELP FOR EMPLOYEES Resources Help your employees manage their health care expenses, now and in retirement, by sharing these resources. How to get started with an HSA Getting your HSA in shape infographic Understanding your HSA infographic HSA Healthy Habits article Tips for new HSA account holders video Saving for health care in retirement Plan for rising health care costs article Tips to save money on health care costs video How much money do I need to retire? article PAGE 15

16 Important notes All investing involves risk, including the risk of loss. For plan sponsor and investment professional use only. Not for use with plan participants. Approved for use in the advisor and 401(k) markets. Firm review may apply. Unless otherwise noted, all data is based on Fidelity recordkept data of 648,937 HSA accounts through December 31, *With respect to federal taxation only. Contributions, investment earnings, and distributions may or may not be subject to state taxation. Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation. Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI FMR LLC. All rights reserved