Three 'Hidden Costs' of Health Savings Accounts (HSAs)

Health Savings Accounts (HSAs) have surged in popularity, driven by their tax benefits and potential to offset the expenses associated with high-deductible health plans.

Data show there are approximately 40 million HSAs now compared to 11.8 million in 2013. These accounts reportedly hold more than $159 billion as of mid-2025, representing a more than 500% increase from approximately ten years ago.

However, last year, the Consumer Financial Protection Bureau (CFPB) stated that hidden costs lie beneath the surface of these accounts, which can undermine the tax advantages that HSAs offer.

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“Health savings accounts are promoted for the tax benefits that chip away at the price tag of health care,” CFPB former director Rohit Chopra said in a release, adding, “Many consumers do not realize the fees, switching costs, and low-interest yields that will come with the accounts.”

The watchdog agency released a report highlighting several costs and fees incurred by many HSA holders, shedding light on challenges faced by consumers trying to manage healthcare finances and taxes.

Here's more of what you need to know.

Note: Since this article was first written, the CFPB ooerates at reduced capacity due to various changes and cuts made amid the second Trump administration.

HSA tax benefits

Health Savings Accounts offer tax benefits that can help individuals save money on healthcare expenses.

First, contributions to HSAs are tax-deductible, meaning individuals can reduce their taxable income by the amount contributed to the account.

Additionally, funds within the HSA can grow tax-free through investments, and withdrawals for qualified medical expenses are also tax-free.

These tax advantages make HSAs a powerful tool for those with high-deductible health plans (HDHPs) to manage healthcare costs while maximizing savings.

HSA contribution limits for 2025 and 2026

However, the IRS limits contributions to your health savings account each year. The amount you can contribute depends on whether you have single or family coverage and are over 55 years old.

• For 2025, Individuals have an HSA annual contribution limit of $4,300, and the limit for family coverage is $8,550.
• The IRS has also announced the 2026 HSA limits. For self-only coverage, the limit rises to $4,440, and for family coverage to $8,750 a year.

Still, the CFPB has argued that hidden costs, many of which people are unaware of, can diminish an HSA’s potential tax benefits.

Hidden HSA costs

1. Fees. According to the CFPB, one of the hidden costs of HSAs is the array of fees imposed by financial service providers. These fees include monthly maintenance, paper statements, outbound transfers, and account closure fees. The agency said these charges can eat into the funds allocated for healthcare needs, directly reducing the benefits of tax savings afforded by HSAs.

2. Portability. Another issue with HSAs is the lack of fund portability, which the CFPB said adds another layer of cost for consumers. According to the agency, employers often choose the financial service provider for employees' HSAs, leading to situations where consumers are captive to their current provider due to expensive exit fees. This lack of flexibility can hinder people from accessing better terms and lower fees elsewhere.

However, it's important to keep in mind that the HSA belongs to you, meaning the account and the money in it are yours — even if you change jobs and your HSA funds do not expire.

3. Yields. Low-interest yields offered by many HSA providers are another hidden cost. Despite recent increases in interest rates, most providers offer interest rates well below 1% and sometimes even as low as 0%. The CFPB noted that, as a result, consumers may end up paying more in fees than they earn in interest, diminishing the overall value of their HSA accounts.

It's worth noting that the American Bankers Association Health Savings Account Council expressed disappoinmtnet with last year's CFPB's findings. Kevin McKechnie, council executive director said in a statement that many of the fees mentioned in the report no longer exist or are not incurred by consumers.

The council believes that the CFPB report misrepresented the industry and didn't capture the value of owning an HSA.

HSA costs: Bottom line

In any case, it is important for account holders to understand fees, lack of portability, and low interest yields associated with HSAs.

It's also worth noting that much of the power of an HSA is realized when you’re able to contribute a meaningful amount each year and, ideally, leave those funds invested for a significant period of time.

So, if you can’t afford to contribute much, because of, for example, tight household finances, other priorities like debt repayment, or just the higher out-of-pocket costs that come with a high-deductible health plan, the tax benefits of an HSA can shrink significantly.​

Additionally, to qualify for an HSA, you must have a high-deductible health plan. That means trading lower monthly premiums for higher out-of-pocket costs. That structure can be challenging for people with chronic conditions, ongoing prescriptions, or families with ongoing medical needs.

If you find yourself pulling from your HSA for regular health bills, you can miss out on tax-free investment growth. The compounding aspect is a large part of the HSA’s appeal.​

During open enrollment season in particular, having this and other knowledge about HSA pros and cons can help you make informed decisions about managing your healthcare expenses and maximizing tax savings.

Related

• 2025 HSA Contribution Limits Rise Again
• Do You Really Know What Your HSA Can Do For You?
• 2026 HSA Limits Are Set: What to Know Now