The Consumer Financial Protection Bureau (CFPB) released a report delving into the hidden costs consumers are forced to pay for health savings accounts.

May 1, 2024 The following is a reprint from CFPB’s website (provided for educational purposes only)

Consumer Financial Protection Bureau signThe Consumer Financial Protection Bureau (CFPB) today released a report detailing the complex costs and fees that many consumers with health savings accounts are forced to pay. There were approximately 36 million health savings accounts in 2023 – holding more than $116 billion. These accounts provide tax benefits to help offset the costs of high deductible health plans. However, these benefits are being offset by charges like monthly maintenance fees, paper statement fees, outbound transfer fees, and account closure fees. Today’s report is part of the CFPB’s continuing efforts to reduce the risks and costs brought by financial institutions as they increase their presence in the American healthcare system.

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

A health savings account is a tax-advantaged account that generally comes with a high deductible health plan. Typically, a health savings account is in the form of a deposit account selected by an employer or a health insurance company. An employee makes tax-deductible contributions that can then be used for certain health care expenses. Unspent contributions can earn interest, and roll over each year. The individual and family contribution limits for 2024 are $4,150 and $8,300, respectively.

Health savings accounts today hold more than $116 billion, a 500 percent increase since 2013. Additionally, the number of accounts rose more than three times from 2013 to 2023, 11.8 million to 35 million, respectively. The significant growth in the accounts has coincided with the rising use of high deductible health plans.

Consumers have reported a range of concerns with health savings accounts. For some consumers, these accounts come with high costs. Employers often decide on the financial service provider that will manage employees’ health savings accounts. The factors that motivate employers can differ from those of employees. Providers design health savings accounts to compete for employers. The result is that health savings accounts can often present challenges and costs for consumers, such as surprise fees, lack of fund portability, and low-yield interest rates.

When a consumer ends up with a health savings account with high fees and inferior terms, it directly reduces the funds they can allocate to their health care needs. High deductible health plans have higher deductibles than other health plans, so many individuals with these plans, such as people with chronic illnesses, experience higher upfront out-of-pocket health care costs.

High costs and fees can quickly erode a consumer’s ability to pay medical bills. In the case of health savings accounts such fees and costs can also erode tax savings. Specifically, the CFPB’s report found:

  • Costly, complex, and captive junk fee structures: Many providers that offer health savings accounts charge various fees, including monthly maintenance fees and paper statement fees. Expensive exit fees, like outbound transfer fees and account closure fees, can hold consumers, who may not have selected their accounts, captive to their current providers. The fees are costly and typically unavoidable.
  • Low interest yields: Despite the recent increase in interest rates across the United States most providers offer consistently low interest rates. Typically, these rates are less than 1%, and, sometimes, even 0%. As a result, consumers could incur significantly more in fees than they earn in interest.

The CFPB has been working to reduce the financial consequences of medical debts as well as to ensure consumers are treated fairly by providers participating in the health care sphere. In September 2023, the CFPB initiated a rulemaking to remove medical bills from many credit reports. In July 2023, the CFPB, along with other federal agencies, launched an inquiry into costly credit cards and loans pushed on patients to pay for health care costs.

Read the CFPB’s report, Health Savings Account Issue Spotlight.

Read Statement of CFPB Director Rohit Chopra on Medical Financial Products.

Read consumer complaints about health savings accounts.

Consumers can submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).


Other articles regarding the CFPB:

2023 is the Year of New Consumer Rights

Consumer Financial Protection Bureau finds Payday and Deposit Advance Loans a Trap for Consumers

Supreme Court finds the Consumer Financial Protection Bureau’s Funding is constitutional

743 words|3.8 min read|Categories: Consumer Financial Protection Bureau, Consumer Issues|By |Published On: July 3rd, 2024|Last Updated: July 3rd, 2024|

Share this article

Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.

*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*

Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Google Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Yelp Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Avvo Reviews
Avvo - Rate your Lawyer. Get Free Legal Advice.
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Martindale-Hubbell Award
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Alignable Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Better Business Bureau
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Google Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Yelp Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Avvo Reviews
Avvo - Rate your Lawyer. Get Free Legal Advice.
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Martindale-Hubbell Award
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Alignable Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Better Business Bureau

In Case You Missed It

  • Into the Shadows: Unraveling the Dark World of Fraud, Schemes, and Scams The Sneaky World of Fraud and Scams: How They Work and Why You Should Be Careful Fraud and [...]

  • Published On: March 30, 2024

    After 100 Years of Protecting Homeowners, Arizona's Law Changes to Give Creditors New Rights to Take Your Home Depending on the value of your home, creditors can now take it if [...]

  • Bankruptcy is a complex process that can have significant implications for your business and personal finances. Before considering business bankruptcy as an option for your struggling business, it's crucial to understand the potential pitfalls [...]

  • In today's consumer landscape, credit cards are the normal tools for managing finances and making purchases. However, having credit card debt can lead to financial stress and vulnerability to predatory schemes. Recognizing the importance [...]