2021 Midyear Devenir HSA Research Report - Executive Summary

Devenir Research

2021 Midyear HSA Market Statistics & Trends Executive Summary

report release date: 9.16.2021

1 | 2021 Midyear Devenir HSA Research Report

Table of Contents

Key Findings......................................................................................................................................... 3 HSA Industry Level Account Data.................................................................................................... 4 Industry Contributions and Withdrawals........................................................................................ 6 HSA Investments................................................................................................................................. 9 Looking Forward................................................................................................................................10 About Devenir.....................................................................................................................................11

Report Methodology

The majority of this report was derived from the 2021 Midyear Devenir HSA Market Survey. This survey was conducted to shed light on the rapidly growing and evolving health savings account market. The survey was carried out primarily in July 2021, and largely consisted of top 100 providers in the health savings account market. All data was requested for the period ending on June 30th, 2021.

All estimates and projections reflect the current environment surrounding health savings accounts and do not contemplate any future regulatory changes to the market. Certain data points from the survey were omitted from this report due to inconclusive data or an incomplete sample set. All statistics are produced using the best available data set, which may at times produce statistics which do not reconcile, both within this report and with previous reports.

Survey responses are self-reported by each HSA provider. When possible Devenir attempts to verify responses through a variety of channels, including but not limited to, press releases, annual reports, prior research, and FDIC filings.

2 | 2021 Midyear Devenir HSA Research Report

Key Findings

Strong HSA asset growth. Led by strong investment growth, health savings accounts grew to $92.9 billion in assets held in over 31 million accounts, a year-over-year increase of 26% for assets and 6% for health savings accounts for the period ended June 30th, 2021.

HSA investment asset growth doesn't slow down. Fueled by continued strong market gains, HSA investment assets soared to an estimated $30.4 billion at the end of June, up 73% year-over-year. On average, investment account holders hold a $17,954 total balance (deposits and investments combined).

Interest in HSA investing continues to grow. There are now almost 2 million accounts that are investing a portion of their HSA dollars, representing over 6% of all accounts.

HSA contribution and withdrawal growth flat. Account holders contributed almost $24 billion to their accounts in the first half of 2021 (up 1% from the year prior) and withdrew $16 billion from their accounts in the first half of 2021 (down 1% from year prior).

$131.2

Total HSA Assets (in billions)

$113.4

$82.2

$97.5 $32.6

$40.2

$49.0

$65.9 $23.8

$53.8 $15.7

Investments Deposits

$3.4 $3.2

2007

$5.5 $5.3 2008

$7.2 $6.8 2009

$9.9 $9.0 2010

$45.2

$12.2 $11.1

$19.3 $15.5

$13.7 $17.1

$24.2 $21.0

$30.2 $4.2

$37.0 $5.5

$26.0 $31.5

$8.3 $36.9

2011 2012 2013 2014 2015 2016 2017

$10.2 $43.5 2018

$58.5 $50.2 2019 2020

$64.9

2021 (est)

$73.2

2022 (est)

$82.2

2023 (est)

Source: Estimates derived from 2021 Midyear Devenir HSA Market Survey, press releases, previous market research, and market growth rates.

3 | 2021 Midyear Devenir HSA Research Report

HSA Industry Level Account Data

Due in part to headwinds created by the COVID-19 pandemic and the related impacts to the employment market, account growth slowed in 2020 and this has continued to lag during the first half of 2021. We continue to see seasonality in the percentage of accoUnts that are unfunded. Accounts are often opened during the fall open enrollment season, but remain unfunded until early the following year. Halfway through 2021, about 18% of all accounts were unfunded, unchanged from a year ago.

Total HSA Accounts

28.3M29.3M30.2M31.1M

26.3M 25.1M 21.0M22.2M23.4M 20.0M 18.2M 16.7M

13.8M 14.5M

11.8M 10.7M 8.2M 9.1M 6.3M 6.8M 7.1M

Funded Accounts Non-Funded Accounts

Average Balance By Year The Account Opened

6/30/2021 6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012

$20,000$18,641

$18,000

$16,000

$15,239

$14,000

$12,000 $10,000

$8,000 $6,000 $4,000 $2,000

$-

$10,607 $9,450 $7,976 $7,102 $6,384 $5,410 $4,708 $4,484 $3,709 $3,567 $3,061 $2,604 $2,723 $2,236 $1,385

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Year Account Opened

4 | 2021 Midyear Devenir HSA Research Report

Health Savings Account Balance Distribution

31%

18%

12%

12%

13%

7% 5%

0%

2%

< $0

$0

$1 - $499

$500 - $999 $1,000 - $1,999 $2,000 - $4,999 $5,000 - $9,999 $10,000 - $24,999 Over $25,000

Distribution By Account Opening Date

19%

16%

13%

14% 14%

Accounts Assets

10% 11%11% 11%

9% 9%

8%

8%

7%

5% 5%

4%

4% 3%

4%

3%

0.1% 0%

1% 0.1%

1% 0%

1% 0%

1% 0%

2% 1%

1%

2%

2%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Year Account Opened

Recent growth in the number of opened accounts may be due, in part, to accounts being moved from provider to provider which effectively resets the apparent account opening date for the same account holder.

5 | 2021 Midyear Devenir HSA Research Report

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