A Health Savings Account (HSA) vendor analyzed how its members spent funds in their accounts and found 93% of the money was spent on regular copays and medical bills. The problem with the high deductible health plan (HDHP) + HSA premise is thus: premiums are affordable for HDHPs because of the high deductible. When an employee is paying $500-$600/month in premium ($6,000-$7,200/year) for a $1,500 deductible plan, setting funds aside in an HSA goes out the window. Employees are already paying for insurance and then being asked to save money for the future on top of that?! The individuals who are saving money in their HSAs are those who can afford to save, as always.
With a different plan structure, an employee could instead pay a lower premium and put a few thousand into an HSA. HSAs could and should be used to save money for healthcare-related expenses, money which could earn interest and aid with ever-increasing healthcare expenses in retirement. However, with current plan designs and costs, the term “health savings account” is a misnomer.