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Data & Research August 27, 2025
Turning HSA Owners into Savvier Investors
Health savings account owners were 22% more likely to contribute if they received practical, encouraging messaging from benefits providers, according to a new study by WEX Inc.
Reported by Edward Rueda
Health savings accounts offer unique tax advantages; unfortunately, most account holders are missing out on investment opportunities related to the funds saved there, according to a report by commerce platform WEX Inc.
Financial advisers often cite HSAs’ “triple tax advantage,” because employee contributions are tax-deductible, withdrawals for qualified medical expenses are tax-free and nonqualified withdrawals after age 65 are taxed at the same rate as individual retirement accounts and 401(k)s. The Internal Revenue Service’s HSA yearly limits for 2025 are $4,300 for individuals and $8,550 for families.
When WEX partnered with Visa to survey 1,208 adults enrolled in high-deductible health plans, which are required for most people to enable them to contribute to an HSA, six in 10 recognized that their HSAs are an important part of their retirement planning, yet only 9% were investing that money.
Similar studies found that HSA owners mostly use their accounts for short-term medical reimbursement rather than long-term investing. The Employee Benefit Research Institute found that one-third of HSA holders withdrew more than they contributed in 2023, and Lively Inc. found that 80% of its HSA accounts’ assets were spent over the course of 2024.
For WEX senior vice president Chris Byrd, the wide gap between HSA owners and investors calls for better education, rather than reprimanding.
“The right approach is not to hit people over the head with a frying pan. ‘If you don’t invest, you’re not maximizing the use of your HSA.’ I don’t think it’s the least bit considerate,” Byrd says. “However, we can nudge people along a path.”
You Own Your HSA, Not Your FSA
HSAs are often confused with flexible spending accounts, or FSAs, but there are several key differences. FSAs set aside funds to reimburse qualified medical expenses, but they generally expire at year’s end and cannot be transferred if an owner changes employment. Once someone sets up an HSA, the funds are theirs in perpetuity, even if they change employment.
“No one else has any control over that [HSA] except for you,” Byrd says. “If you leave your employer, you can take it with you. If you want to move it from one custodian to another, you can do that.”
Another major difference is that employers can contribute to HSAs, but not FSAs. WEX found that 74% of surveyed HSA holders both contributed to their accounts and received employer contributions. The average individual employee with an HSA contributed $1,716, while the average employer contributed $1,128. For families with children, the contributions increased to an average of $1,811 from employees and received $1,257 from their employers.
Among the age groups of people in WEX’s survey, young singles were the demographic with the highest HSA participation rate (79%), followed by families with children (75%), pre-retirees (74%) and middle-age singles (68%).
Overcoming Fear of High Deductibles
HSAs are only available to those participating in high-deductible health plans, which set higher limits that patients must pay out of pocket before insurers pay claims. Byrd acknowledges that high deductibles are “probably the biggest blocking factor,” keeping people from enrolling in HSA-eligible plans. But those health plans also have lower premiums, and employer contributions can also help with savings.
“Think about [HSAs] as the ultimate financial wellness tool,” Byrd says. “You put away little chunks and then you have that peace of mind that when something happens, you have a place where you can go to pay for it, whereas with other household emergencies you might not.”
Access to HSAs will greatly expand in 2026, since President Donald Trump’s major tax law will deem anyone with an Affordable Care Act bronze or catastrophic health insurance plan eligible to open an HSA. In 2024, 31% of the 21.4 million Americans who enrolled in ACA coverage joined bronze plans, according to the Centers for Medicare and Medicaid Services.
Messaging Matters
Once HSA holders have enough saved to cover their deductible, Byrd advises that they can start to think about investing the remaining assets. WEX’s support tool for its employee benefits platform, My HSA Planner, educates participants and provides investment recommendations based on individual financial goals.
Byrd’s team found that messaging plays a crucial part in HSA participation and engagement. In one experiment, My HSA Planner sent an encouraging message to a group of account owners, reading in part, “Learn about the options for making a contribution and watch your balance grow.” Recipients of the message increased their yearly contributions by an average of $470 and used the tool 22% more than those who received no messaging.
WEX’s study found the five most-motivating messages for HSA owners were:
- “[HSAs] can pay for qualified medical expenses such as deductibles, co-pays and prescriptions.”
- “[HSAs] are flexible and easy to use on medical expenses.”
- “[HSA owners] can withdraw money tax-free for qualified medical expenses.”
- “[HSA owners] can use funds in retirement for any purpose without penalty.”
- “There is an option for employer contributions to the account.”
Byrd says this practical messaging is more motivating than financial jargon like the “triple tax advantage,” and for messages to be effective, they need to suit an individual’s life stage and financial goals.
“We should not be talking to people as though we’re giving a compliance seminar,” Byrd says. “We’re trying to figure out what actually motivates people to do things that that are good for them.”
WEX and Visa conducted itsonline survey between January and February 2025.
