The $150B+ HSA/FSA Market Opportunity for Wellness Brands

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The Scale of the Market

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By the end of 2024, Americans held nearly 147 billion dollars in HSA assets across 39 million accounts (Devenir Research). Contributions in 2024 totaled 56 billion dollars, with 42 billion dollars withdrawn for qualified expenses. FSAs added billions more, with an estimated 3 billion dollars forfeited each year due to use-it-or-lose-it deadlines.

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These accounts represent one of the fastest-growing health-related spending pools in the US. For merchants, this is money already allocated for health purchases. The opportunity lies in capturing it.

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Why Wellness Brands Are Well Positioned

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Pharmacies, vision centers, and traditional medical suppliers already benefit from HSA/FSA spending. The emerging space is wellness. Supplements, functional foods, recovery products, and stress-management tools align with IRS criteria when supported by LMNs.

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Consider a customer in a 25 percent tax bracket. A 100 dollar supplement order effectively costs them 75 dollars. For higher-ticket products like recovery tech or ergonomic equipment, the savings are even more significant. That built-in financial advantage makes these purchases easier to justify.

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Growth Trends in HSA/FSA Use‍

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• HSA assets have grown by double digits annually since their creation in 2003.
• The average account balance is over 3,000 dollars, but fewer than 10 percent of account holders invest their funds. Most keep money liquid for regular expenses.
• Employers continue to add HSAs as part of high-deductible health plans, expanding the eligible customer base.

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This growth means the pool of potential customers with pre-tax dollars is expanding every year.

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Why Most Merchants Miss Out

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Despite the size of the opportunity, most wellness merchants are not capturing these dollars. The reasons include:

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• A lack of awareness that products qualify.
• Concerns about IRS or HIPAA compliance.
• Technical barriers in setting up checkout or post-purchase flows.

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The result is that customers spend their HSA/FSA dollars elsewhere, even when they prefer wellness solutions.

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Merchant Benefits

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Merchants that embrace HSA/FSA eligibility can expect:

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• Increased average order value. Customers spend more when they perceive a discount through tax savings.
• Higher conversion rates. Clear eligibility reduces cart abandonment.
• Customer loyalty. Pre-tax savings create financial relief that encourages repeat purchases.

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The dollars are already earmarked. Brands simply need to position themselves as the easiest, safest place to spend them.