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Consumer-driven health care (CDH) accounts, such as health savings accounts (HSAs), health reimbursement arrangements (HRAs) and flexible spending accounts (FSAs), offer huge benefit to consumers, employers, and the U.S. health care system. But, despite being widely offered by employers, these accounts are too often under-utilized and under-funded.

According to Aite Group research, only 23 percent ($86.3 billion) of the $371 billion spent on out-of-pocket health care costs in 2018 are estimated to flow through tax-advantaged accounts. This means that a staggering $285 billion will be spent on out-of-pocket expenses using post-tax dollars, leaving billions in tax savings on the table. Broken down, a simple change in the way consumers pay for their eligible out-of-pocket medical expenses would save employers $22 billion in FICA taxes and consumers another $85 billion in state and federal taxes (assuming an average federal/state tax rate of 30 percent).

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