October 10, 2018 | By Logan Butler

With higher out-of-pocket costs increasingly the norm in employer-sponsored health care, the health savings account (HSA) has become a crucial tool to help employees pay for the care they need while maintaining financial security.

Because HSA funds roll over, accumulate and can eventually earn interest tax-free, savvy employees have recognized the great potential of these accounts as retirement savings vehicles. Those who can afford it are even maxing out their HSAs to the annual contribution limits, which for 2019 are $3,500 for an individual and $7,000 for a family—up $50 and $100, respectively, from the 2018 caps.1

That said, very few employees are contributing the maximum amount to their HSAs. According to Benefitfocus' latest State of Employee Benefits report, the average employee contribution to an individual-coverage HSA for 2018 was a little over $1,400. That's less than 50 percent of the contribution limit for the year, and well below the average annual deductible amount for an HSA-eligible health plan. For the most part, it seems, employees aren't even saving enough to cover their anticipated medical costs for the year, much less set themselves up for retirement.

Some of the reason for this could just be limited incomes and the inability to afford further paycheck deductions. But some can almost certainly be attributed to other factors, such as lack of education and decision support around HSAs at open enrollment, which is the prime time for contribution elections.