February 25, 2025
On February 11, 2025, the Congressional Research Service (CRS) published an updated report on HSAs.
An HSA is a tax-advantaged account that individuals can use to save and pay for unreimbursed medical expenses (e.g., deductibles, copayments, coinsurance, and services not covered by insurance). It was first authorized in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. The report includes an overview of the principal rules governing HSAs, including with respect to eligibility, contributions, and withdrawals, as well as recent data trends in HDHP enrollment and HSA utilization.
The report noted that HSA-qualified HDHP enrollment generally increased from the mid-2000s to 2020. Large employers had a higher percentage of covered employees enrolled in HDHPs with a savings option in 2024 relative to small employers (28% to 23%). The report also cited a review by the Bureau of Labor Statistics, which was based on survey data from private-sector and state and local government employers, that found 39% of workers had access to an HSA through their employer in 2024. Access to HSAs for private industry workers stabilized from 2021 to 2023 before increasing in 2024.
From tax years 2017 through 2021, employer HSA contributions saw steady growth, particularly for individuals aged 26 to 64, while individual contributions remained unchanged. The number of non-rollover HSA withdrawals also increased from tax years 2004 to 2020. The report also noted that the 26-34 age bracket has consistently had lower HSA withdrawal rates compared to other age groups.
Employer Takeaway
While the report did not include any specific guidance or recommendations for group health plans, employers should familiarize themselves with the recent data trends in HSA utilization and review existing rules governing HSAs and HSA-qualified HDHP enrollment. For further information on HSAs, please download a copy of the PPI publication Health Savings Accounts: A Guide for Employers.
Health Savings Accounts (HSAs)
PPI Benefit Solutions does not provide legal or tax advice. Compliance, regulatory and related content is for general informational purposes and is not guaranteed to be accurate or complete. You should consult an attorney or tax professional regarding the application or potential implications of laws, regulations or policies to your specific circumstances.
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