As people struggle to set aside enough money to see them through retirement while they’re also hoping to head off today’s and tomorrow’s health care bills, a study shows that workers who put funds into both a 401(k) and a health savings account are saving more overall than those who just put money into a single account.

In wondering whether contribution rates to one or the other are negatively impacted when workers have the option to save to both an HSA and a 401(k), Alight Solutions conducted its 2018 HSA and 401(k) Contribution Analysis and found that on average, employees who contribute to both an HSA and a 401(k) save 8.9 percent of pay in their 401(k), plus an additional 2.9 percent in their HSA. That’s higher, it says, than the average for workers who save only in a 401(k).

But workers are losing out on a lot of opportunities, since just 20 percent of employees who are eligible for an HSA contribute to one. In fact, 36 percent of employees enrolled in an HSA-eligible health care plan don’t contribute to an HSA.

The question of whether saving to one type of account could cannibalize potential savings to the other drove the analysis, and uncovered additional findings.

While 61 percent of workers use employer-provided health care and also save in a 401(k), 10 percent of workers use neither. Fifteen percent opt for the 401(k) alone, while 14 percent go for just health care.

Salary has a lot to do with that, however; the analysis shows that the higher the employees’ salaries, the greater the likelihood that they’re contributing to both HSAs and 401(k)s.

The report finds that workers making more than $40,000—mostly salaried workers—are much more likely to participate in both, while those making less than $40,000—chiefly hourly workers—are more likely to choose one or the other, or even opt out of both.

Whether they were hourly or salaried, all workers in the study were eligible for both medical and 401(k) benefits.

There’s not that much gender difference in participation rates among those who participate in both 401(k)s and HSAs, although when people choose just one benefit, the men are more likely to choose health coverage while the women are more likely to choose 401(k) participation.

The study also finds that participation in both health care plans and 401(k) plans together is lower for people under age 26 and over age 65. In addition, whether people are married or not affects participation.

Among those making at least $40,000, single workers are more likely than married workers to use both benefits.

That could be chalked up to married workers opting out of health care coverage because they can be covered by their spouses’ plans.

But among workers making between $20,000–$40,000, only 61 percent of single workers are enrolled in health care coverage, compared with 74 percent of married workers.

Lower-paid single workers were also most likely to opt out of both, with 22 percent staying out of both health care and retirement coverage.

Instant Insights /

Do workers saving in both 401(k)s and HSAs end up cannibalizing one account for the other?

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