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2019 HSA Spend Report

Shobin Uralil · January 23, 2020 · 3 min read

contribute-too-much-to-hsa

## HSA Users are Spending, Not Saving The majority of HSA contributions are spent on routine healthcare visits, but show a shift toward online retailers and digital health experiences. ### The Rising Cost of Healthcare + High Deductible Health Plans In 2019, 36 percent of American household costs went to out-of-pocket medical care. Needless to say, this has serious implications on the wellbeing of American families and the future of our economy -- and it’s only expected to get worse. Over the last decade, healthcare spending has been [rising year-over-year](https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/index) (4.6 percent), with costs rising faster than the annual rate of inflation. Driven by rising healthcare costs, employers are increasingly moving to high deductible healthcare plans (HDHPs). HDHPs are no longer a trend in healthcare -- they are the norm. Almost half (46 percent) of employer-sponsored health plans are now high deductible offerings. Adding direct to consumer health plans, which are mostly HDHPs as well, through state-exchanges and other direct to consumer health plans options, it’s clear that HDHPs are now one of the most common health plans on the market. This move to cut costs has put more pressure on the average American consumer to spend more of their savings on everyday health expenses.

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## HSA Consumer Spending Habits HSAs can be split into three categories of account capabilities: savings, investments, and spending. The average HSA account holder will spend 96 percent of their annual contributions on qualified medical expenses. This excludes any year-over-year carry from their existing HSA savings or investments. In 2019, Lively HSA spending was used for medical (81 percent), dental (16 percent), and vision costs (3 percent). Surprisingly, these costs are focused around expected and typical healthcare costs -- such as preventative care and regular doctor visits -- rather than hospital visits. The typical Lively HSA account holder averaged 13 spend transactions per year. This is just above the average HSA account holder, likely correlated to the higher than average account balance of a Lively account holder vs. an [average HSA account holde](https://www.devenir.com/research/2019-midyear-devenir-hsa-research-report/)r. The average Lively HSA account holder spent $117 per transaction, on par with the average HSA account holder. ![2019 HSA Spend Report](//images.ctfassets.net/6j8y907dne6i/5UU8ToRrkcQyX4sg7ru7ZL/ca1e76b78ec0ca910a4ef5a0201768d2/hsa_spend_hero.png) The most obvious, yet important discovery of this spend data, is that we can clearly see that HSA funds are used as they were originally designed and intended, for yearly medical expenses. When expected medical, dental, and vision expenses are combined, over 70 percent of all HSA funds are being used for yearly expenses. Combined with prescription drug spending, that jumps to 80 percent. We would expect this distribution to climb even further, as yearly service-based medical costs continue to increase. While using HSA funds for regular and expected medical services reduces overall out-of-pocket healthcare spending (when compared to those without access to an HSA and the triple-tax savings that come with it), more education is required to help HSA account holders understand the benefits of saving and investing their annual contributions for the long-term.

Download the HSA Report

Shobin Uralil

Shobin Uralil

Shobin Uralil is the COO and Co-Founder of Lively. Lively is a modern Health Savings Account (HSA) platform for employers and individuals. A 401(k) for healthcare. Lively HSAs works alongside high deductible health plans to make healthcare easier for everyone. Lively is not a bank but has all of the benefits of one. Prior to Lively, Shobin was the Vice President of Operations at Retroficiency, an energy analytics software company and co-founder and CEO of kWhOURS, Inc., an energy auditing software. Shobin earned a BS in Business Administration from Georgetown University and an MBA from MIT’s Sloan School of Management, where he was the recipient of the inaugural Howard and Carol Anderson fellowship for entrepreneurship.

piggy bank on pink background

Benefits

2024 and 2025 HSA Maximum Contribution Limits

Lively · May 9, 2024 · 3 min read

On May 9, 2024 the Internal Revenue Service announced the HSA contribution limits for 2025. For 2025 HSA-eligible account holders are allowed to contribute: $4,300 for individual coverage and $8,500 for family coverage. If you are 55 years or older, you’re still eligible to contribute an extra $1,000 catch-up contribution.

comparing hsa versus fsa

Benefits

What is the Difference Between a Flexible Spending Account and a Health Savings Account?

Lauren Hargrave · February 9, 2024 · 12 min read

A Health Savings Account (HSA) and Healthcare Flexible Spending Account (FSA) provide up to 30% savings on out-of-pocket healthcare expenses. That’s good news. Except you can’t contribute to an HSA and Healthcare FSA at the same time. So what if your employer offers both benefits? How do you choose which account type is best for you? Let’s explore the advantages of each to help you decide which wins in HSA vs FSA.

Benefits of HSA employer matching

Health Savings Accounts

Ways Health Savings Account Matching Benefits Employers

Lauren Hargrave · October 13, 2023 · 7 min read

Employers need employees to adopt and engage with their benefits and one way to encourage employees to adopt and contribute to (i.e. engage with) an HSA, is for employers to match employees’ contributions.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.

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