The Convergence of Health Savings Accounts and 401(k)s: Vision or Illusion?

The latest Aite Group report shows that HSAs are evolving into longer-term tax-advantaged investment accounts for future health expenses.

Boston, June 6, 2019  — While HSAs are spending accounts for most employees in the U.S., the number of HSA investors and the assets in their accounts are catching the attention of retirement plan advisors in the defined contribution/401(k) marketplace who are betting on HSA investments to boost their existing low-margin businesses. Forward-looking retirement plan advisors and traditional financial advisors are starting to take a strategic look at the investment case for HSAs, noting the role that HSAs can play within a broader wealth management and retirement savings portfolio. Aite Group’s new report, The Convergence of Health Savings Accounts and 401(k)s: Vision or Illusion?, explores the potential shift in distribution channels and the role that traditional and new market stakeholders will play as the story unfolds.

“As HSAs’ popularity grows, small but growing numbers of employers and employees are taking note of their unsung feature as long-term investment vehicles for future health expenses,” explains Inci Kaya, analyst at Aite Group. “Investors who use HSAs as an investment vehicle are few, but the number is growing,” she adds.

“Forward-thinking record-keepers, retirement plan advisors, and HSA providers are eyeing these accounts, despite their rarity, as part of long-term growth strategies,” states Dennis Gallant, senior analyst at Aite Group.

This report examines how the chips will fall for HSA investments and what a merged health 401(k) product may look like for HSA providers, bank and nonbank HSA custodians, and third-party administrators. It is based on interviews conducted from Q2 2018 to Q1 2019 with 50 executives from health benefits brokers, retirement plan advisors, financial advisors, broker-dealers, 401(k) record-keepers, HSA providers, and custodians.

To request a press copy of this report or to speak with Dennis Gallant or Inci Kayaabout this topic, please contact us at pr@aitegroup.com.

About Aite Group:
Aite Group is a global research and advisory firm delivering comprehensive, actionable advice on business, technology, and regulatory issues and their impact on the financial services industry. With expertise in banking, payments, insurance, wealth management, and the capital markets, we guide financial institutions, technology providers, and consulting firms worldwide. We partner with our clients, revealing their blind spots and delivering insights to make their businesses smarter and stronger. Visit us on the web and connect with us on Twitter and LinkedIn.

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