![]() Comparing differences by gender, male accountholders (of all races) accrued a balance of $6,517 on average, more than 3 times the average for women ($1,981). Accountholders in disproportionately white ZIP codes had an average HSA balance of $5,004, compared with $3,438 and $3,737 balances for accountholders living in disproportionately Black and Hispanic ZIP codes, respectively. The Employee Benefit Research Institute also found race and gender disparities in HSA usage. Only 3.6% of accountholders living in the ZIP codes of the lowest income quartile had made investments, compared with 11.6% of those living in a ZIP code in the highest income quartile. Likewise, a 2020 study by the Employee Benefit Research Institute found that the balance was $2,229 for an accountholder living in a ZIP code in the lowest income quartile, compared with $5,919 for the highest income quartile. How about accumulation? Are HSAs proving to be an effective tax-advantaged vehicle for saving dollars that can meet healthcare expenses in retirement? Seven percent of HSA accounts held investments in 2022, and 32% of overall HSA assets are invested, according to an annual study of the HSA market by Devenir Research, a research and consulting firm. Contribution levels fell along with income, and only a small percentage of low-income tax returns contributed. An analysis by the Congressional Research Service of 2017 IRS data found that tax returns with more than $500,000 in adjusted gross income were the most likely to report individual HSA contributions, and returns between $200,000 and $1 million were the most likely to report employer contributions. IRS data shows that high-income people are the most likely to use HSAs-and benefit from them. But contributions can also be saved and invested for the long term. (This week, the IRS announced a large increase in contribution limits for 2024, driven by higher inflation.) Contributed amounts can be used to meet deductibles and other out-of-pocket healthcare costs in any given year. In both cases, an additional $1,000 catch-up is allowed for workers age 55 and older. For example, this year the combined limit for employers and an individual worker is $3,850, and $7,750 for families. Employers and employees can contribute to the accounts, up to a certain limit, which is adjusted annually. In 2023, HSAs can be used by people enrolled in qualifying high-deductible health plans, or HDHPs, with a minimum deductible of $1,500 (individual coverage) or $3,000 (family coverage). Who’s Seeing the Most Benefits From HSAs?
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