Record HSA participation masks a retirement-plan gap

Record HSA participation is now a fixed feature of the American workplace: 83% of eligible employees contributed in 2025, up ten percentage points from 73% a year earlier, according to the Plan Sponsor Council of America's 2026 Health Savings Account Survey as reported by 401(k) Specialist. The same survey, though, finds only a quarter of employers actively position the accounts as part of a unified retirement savings plan.

That gap matters because HSA balances only generate retirement value when they are invested: HSA Bank's most recent plan sponsor survey found average balances of $6,477 in 2025 but just 22% of participants using their accounts as investments, up only from 18.9% in 2023 to 20.3% in 2024. Most employees are still spending those balances on near-term medical costs, even as the survey's authors argue the accounts' unique tax advantages give them a natural retirement role.

The design features are in place: 69% of sponsors now offer HSA investment options, up nearly 13% since 2022, and 77% contribute to employee accounts, with 61% making set contributions based on coverage levels. Yet only a quarter of employers actively encourage employees to use the accounts as a retirement strategy.

PSCA's Hattie Greenan describes the accounts shifting from a healthcare spending vehicle into a long-term retirement strategy, while HSA Bank's Ann Brisk says employees still view them as spending accounts for near-term expenses. The behavior data supports Brisk: 46% of organizations auto-enroll employees in HSAs when they join a qualified health plan and 35% reward wellness participation, but few pair those features with retirement framing.

The record contribution rate was the easy win; converting those balances into invested retirement assets is harder because it requires sponsors to name the retirement role out loud. The survey offers plan sponsors a path: make the HSA behave like a retirement account from day one, or keep watching the 22% investment rate.