How well do consumers understand HSAs? About half of Americans think they do, according to the latest research from the LIMRA Secure Retirement Institute.
A survey of more than 2,000 Americans found that 51 percent said they were somewhat or very knowledgeable about health savings accounts, with younger generations being more confident in their knowledge (59 percent of millennials and 55 percent of Gen Xers) than older generations (44 percent of baby boomers and 28 percent of the silent generation). This discrepancy is most likely attributable to the popularity of high-deductible health plans among younger, healthier consumers.
The survey also showed, however, that despite this confidence, many consumers have misconceptions about HSAs. Among them:
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49 percent of consumers who state they are very knowledgeable on HSAs believe they must spend the entire HSA balance by the end of the year
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Only 39 percent of all consumers understand the difference between an HSA and a flexible spending account
Additionally, for many consumers, HSAs blur the line between investment and spending accounts. While 74 percent of participants say an HSA is part of their retirement strategy, only 27 percent are using it to save for future health expenses but instead spending it on immediate health care costs.
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What can be done to increase effective use and understanding of HSAs? Consumers who showed most familiarity with HSAs told LIMRA that the knowledge came from employers.
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Emily Payne
Emily Payne is director, content analytics for ALM's Business & Finance Markets and former managing editor for BenefitsPRO. A Wisconsin native, she has spent the past decade writing and editing for various athletic and fitness publications. She holds an English degree and Business certificate from the University of Wisconsin.
