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New LIMRA Secure Retirement InstituteUnderstanding HSAs research finds 51 percent of American consumers consider themselves to be very or somewhat knowledgeable when it comes to the features and benefits of health savings accounts (HSAs).

Younger consumers, including Millennials (age 18-36) and Gen X (age 37-52), are more likely to express knowledge about HSAs than older generations. Fifty-nine percent of Millennials and 55 percent of Gen X consumers state they are somewhat or very knowledgeable about HSAs. Only 44 percent of Baby Boomers (age 53-71) and just 28 percent of the Silent Generation (age 72+) said they feel the same way.

However, self-reported data doesn’t always mean they are truly knowledgeable. Almost half (49 percent) of consumers who state they are very knowledgeable on HSAs also incorrectly believe that an account owner is required to spend the entire HSA balance by the end of the year or risk losing it.  Additionally, only 39 percent of all consumers understand the difference between an HSA and a flexible spending account (FSA). This disconnect between subjective knowledge and actual knowledge further highlights a need for education on HSAs.

Consumers often learn about HSAs through participation in high-deductible health plans (HDHPs). Older generations are less likely to participate in HDHPs1, which may explain the generational differences. Generally, when compared with other health care plans, HDHPs have lower monthly premiums with higher out-of-pocket costs and deductibles. These plans tend to be more popular with younger, healthier consumers who have lower planned medical expenses.

HSAs, tax advantage medical savings accounts, are a benefit of HDHPs. The funds in these accounts can be used for current or future qualified medical expenses, including health care costs in retirement. LIMRA Secure Retirement Institute research finds 74 percent of HSA participants indicate that HSAs are a part of their retirement strategy. However, on average HSA account holders appear to use their accounts like a checking account to cover current expenses like deductibles, coinsurances and copayments rather than taking advantage of the tax preference by contributing the maximum allowed each year2. The Institute study found only 27 percent of HSA owners use the account to save for future health care expenses. Since the money put into an HSA doesn’t have to be spent in the same year it is placed into the account, the money can be saved for qualified medical expenses in the future, like during a consumer’s retirement years. Health care costs in retirement can be significant. According to Fidelity’s Retiree Health Care Cost Estimate, a 65-year-old couple who retired in 2017 will need an estimated $275,000 to cover their healthcare costs in retirement.

Enrollment in high-deductible, HSA-eligible health plans have been increasing over the years. In 2015, EBRI estimated there were between 20-22 million consumers and their dependents were enrolled in HSA-eligible plans3. According to the Kaiser Family Foundation, 29 percent of workers were enrolled in a HDHP with a saving option (HSA or health reimbursement arrangement (HRA)4.

Consumers who were familiar with HSAs were most likely to say they obtained the information about the benefits and features of HSAs through their employers. This finding suggests employers are the most influential over workers when it comes to these benefits. Employers should use this opportunity to help educate their employees on the benefits of using HSAs, including their use in retirement.

LIMRA Secure Retirement Institute’s findings are based on a nationally representative survey of 2,141 Americans in April 2017.


A research briefing of the findings will be available to LIMRA members soon. 


1 “The State of Employee Benefits: Insights and Opportunities Based on Behavioral Data,” Benefitfocus, 2017.

2 “Trends in Health Savings Account Balances, Contributions, Distributions, and Investments, 2011-2016: Statistics from the EBRI HSA Database,” EBRI Issue Brief #434, Employee Benefit Research Institute, 2017.

3 “Health Savings Account Balances, Contributions, Distributions, and Other Vital Statistics, 2015: Estimates from the EBRI HSA Database,” EBRI Issue Brief #427, Employee Benefit Research Institute, 2016.

4 “Employer Health Benefits: 2016 Annual Survey,” Kaiser Family Foundation and Health Research & Educational Trust, 2016.

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