Inspira Financial Report Finds Gen Z Employees Are Missing Opportunities to Benefit From Health Savings Accounts

OAK BROOK, IL / ACCESSWIRE / March 6, 2024 / Inspira Financial, a leading provider of health, wealth, retirement, and benefits solutions, today released a report exploring how four generations - Gen Z through baby boomers - are using health savings accounts (HSAs) and how employers can proactively tout their HSA benefit to boost their employees' retirement savings. The report finds that young employees, in particular, lack the financial literacy to fully take advantage of the benefit.

"Our research supports the idea that planning for short- and long-term health care needs are elevated when they are put in the context of retirement readiness for all generations, but specifically for younger workers who need more education and understanding of beneficial tools like an HSA," said Bryan Levy, managing director of strategy for Inspira. "Employers play a critical role in supporting not only the youngest employees, but all employees, to increase understanding and adoption of this critical benefit."

The generational divide

The report, "Great health shouldn't be optional: The growing value of health savings accounts (HSAs) for every generation," unveils an alarming lack of health care savings awareness among Gen Z employees. Out of all the consumers expected to make an out-of-pocket payment for health care, Gen Z is the least likely (32%) to be aware that they would need to make such a payment. This lack of awareness reverberates into their saving habits with one-third of employees under the age of 30 contributing nothing to their HSA annually, and only 14% contributing over $3,000 per year. As the benefits of the HSAs materialize on longer time horizons, America's youngest workers are missing out on an important opportunity for a more secure financial future.

Millennials, for whom HSAs might be particularly useful due to their high utilization of the health care and mental health systems, show a modest uptick in engagement with their HSAs. Roughly one-third (29%) of accountholders 30-39 are contributing over $3,000 to their HSAs annually. Encouragingly, the report also finds that this generation is using their HSAs as a tax-protected investment vehicle, with one in five (21%) of those eligible investing HSA funds.

Engagement with and use of HSAs increases steadily with Gen X and baby boomers, as their health care needs and expenses increase with age: 43% and 47% of Gen X and baby boomer HSA accountholders respectively contribute more than $3,000 per year. Baby boomers also have the highest cash balance compared to any other age bracket, with investment balances averaging just over $19,300.

An opportunity for employers

The report also highlights the mutually beneficial relationship between employee and employer with respect to HSAs. It outlines steps for employers to be more proactive in helping employees take advantage of their benefits, which can help pay for health care today or can be saved to pay for health in retirement.

"There's a huge mutually beneficial opportunity for employers to play a role in educating their employees about how to take advantage of their benefits. HSAs have the power to lower barriers to immediate health care needs, which can reduce long-terms costs, increase presenteeism, and protect - and expand - retirement savings," Levy says.

The report draws from proprietary aggregate data of more than 700,000 Inspira HSA accountholders, as well as primary research and third-party sources to support its findings.

To learn more, download the report here.

About Inspira Financial 
Inspira Financial provides health, wealth, retirement, and benefits solutions that strengthen and simplify the health and wealth journey. With more than 7 million clients holding over $62 billion in assets under custody, Inspira works with thousands of employers, plan sponsors, recordkeepers, TPAs, and other institutional partners - helping the people they care about plan, save, and invest for a brighter future. Inspira relentlessly pursues better outcomes for all with our automatic rollover services, health savings accounts, emergency savings funds, custody services, and more. Learn more at inspirafinancial.com. 

Contact Information

Emily Burns Perryman
Manager, PR & Communications
mediainquiry@inspirafinancial.com
847-594-0859

SOURCE: Inspira Financial

View the original press release on newswire.com.