Your HSA is a retention tool you’re not selling
You fund it. Your employees drain it. That’s the entire lifecycle of most HSA programs, and it’s a missed opportunity sitting in plain sight on your benefits statement.
Health Savings Accounts are more popular than ever. In 2025, 83% of employees with an HSA contributed, up from 73% the year before, and the average balance climbed to $6,477. On paper, that looks like a program working exactly as intended. Look closer, and the picture changes. Only 22% of participants invested any part of that balance. The other 78% left their money in cash, treating a wealth-building account like a checking account for copays, where it slowly loses ground to inflation year after year.
The primary reason for this is framing. Only one-quarter of employers position the HSA as part of a long-term retirement strategy. So, most employees never hear the one thing that makes the HSA remarkable: it’s the only account in the American tax code with a triple tax advantage. Money goes in tax-free, grows tax-free, and comes out tax-free when it’s spent on qualified medical costs. No 401(k) or IRA can match that.
The difference in outcomes is substantial. Accounts with some portion invested carry an average balance of $22,635. Cash-only accounts average $2,469. Same benefit, same contribution, nearly ten times the value, and the only variable is whether someone understood they could invest.
Younger workers are asking for exactly this
If you’re trying to attract and retain younger talent, the appetite is already there, and it’s going unmet. Forty-four percent of employees say they want to invest more of their HSA, and that rises to 50% among millennials. But only 25% strongly agree their employer gives them the education to actually do it. That gap between “I want to” and “I know how” is your opening.
Gen Z is already primed for the message. 84% of Gen Z employees made an intentional financial change in the past year, from budgeting to paying off debt to investing. These are people actively looking for ways to build long-term financial security. The HSA is one of the best tools available, and most people have no idea.
The need is real, and it’s expensive
This isn’t a nice-to-have. A 65-year-old retiring in 2025 can expect to spend an average of $172,500 on healthcare over the course of retirement, and that figure climbs every year. The HSA is arguably the single best vehicle to prepare for that cost, precisely because it was built for medical spending. An employee who invests steadily through their working years walks into retirement with a dedicated, tax-free healthcare fund. An employee who spent it down on this year’s dentist visits walks in with nothing.
What this means for employers
The HSA you already fund becomes a genuine differentiator the moment you communicate it as wealth-building rather than a spending account. That’s not a new line item. It’s a plan you already pay for, but it works harder with better messaging.
Employers know education is the weak link. Nearly two-thirds (65.5%) name employee education as their top HSA-related concern, yet half only provide HSA education during open enrollment, one hurried window a year. Year-round framing is the fix, and it’s one of the cheapest moves in the benefits playbook. Talk about the investment option outside of enrollment. Show the math on cash versus invested balances. Make the triple tax advantage a headline, not a footnote. The employees who act on it will remember who told them, and that’s the kind of thing that shows up in retention.
