HSA News for December 16, 2019
HSA news is compiled weekly by Mr. HSA, Roy Ramthun.
News from Washington
Houses Passes Sweeping Bill to Lower Drug Prices
On December 12, the House of Representatives passed a sweeping bill which would allow the government to negotiate lower prices for prescription drugs. The bill passed on a largely party-line vote. However, the bill is almost certain to die in the GOP-led Senate given that Senate Majority Leader Mitch McConnell (R-KY) has vowed to block it.
Turf War Derails Bipartisan Push on Surprise Medical Bills
A bipartisan bill to protect patients from surprise medical bills is not expected to pass this year due to sharp divisions over the legislation, according to congressional aides in both parties. With the key committees in the House pushing competing ideas, leadership is waiting until next year instead of including it in must-pass government funding legislation due to be voted on next week.
Lawmakers Strike Spending Deal to Avert Shutdown
Lawmakers reached a deal in principle on 12 annual spending bills to fund the government and avoid a shutdown. Details of the legislation remain under wraps, but Democrats say they have received assurances that Trump will sign the bills once they pass, averting a shutdown after the Dec. 20 funding deadline.
Two Obamacare Taxes Likely to Be Repealed in Year-End Funding Deal
A year-end government funding package is likely to include repeal of Obamacare’s Cadillac Tax and medical device tax, according to sources familiar with the talks. A final deal on the package has not yet been announced, but sources say the Obamacare tax repeals are likely to be included.
New Efforts to Enhance HSAs
Whether you watch CNN or Fox News, you're probably not seeing much breaking news or panel discussion about HSA expansion and enhancement. But behind the scenes, our elected representatives are considering some initiatives that would make HSAs more attractive and accelerate adoption beyond the estimated 25 million accounts that are open today. Here's where we're at.
HSA Studies & Analysis
Reader Poll: (Still) Early Days for HSAs
The National Association of Plan Advisers asked readers how, if, and how long HSAs are fitting in with their focus. While most of this week’s respondents had clients with HSAs (57%), most had not been involved with the education, administration or sale of the option. A plurality of this week’s respondents (35%) had only been working with HSAs for 1-2 years, and another 1 in 10 (11%) for less than a year.
HSA Compliance Corner
How Do Employees Report HSA Contributions and Distributions on Their Federal Tax Returns?
Employees with HSAs must file a Form 8889 as an attachment to Form 1040 for any year in which they make or receive HSA contributions (including employer contributions), or for any year in which they take an HSA distribution. Spouses who have reportable activity in their own HSAs must file separate Form 8889s, even if they file jointly.
HSA Best Practices
Following Up on HSAs After Open Enrollment
Educating employees about HSAs can help them maximize their benefit. Before educating employees, employers themselves have to make sure they are educated about HSAs. Plan sponsors should focus on two key messages: (1) the cost of health care continues to grow significantly, and (2) the tax advantages of HSAs.
HSAs: Reaching Beyond Traditional Health Expenses
Your clients and employees spend a great deal of time and money worrying about health and wellness. Providing clients with tools and strategies to help bend the cost curve as well as the best benefits possible is crucial to your success. Figuring out how HSAs can play a larger role may be a key way to do that. For more insights, listen to this podcast sponsored by WEX Health.
The HSA Market
Facts You Haven’t Learned About HSAs
Fi360 and HSA Bank recently hosted an informational webinar for retirement plan advisers focused on the evolving topic of HSAs. According to the trio of HSA experts, the landscape for these important investment accounts has reached a tipping point, having moved from an initial period of innovation to a period of mainstream adoption.
HSAs & Retirement
Medicare Enrollment Can Be Confusing and Lead to Unexpected Costs
As more Americans postpone retirement, a growing number are experiencing Medicare enrollment problems that can saddle them with hefty penalties and months-long coverage gaps. The roots of the problem are Medicare’s complex rules and a lack of notice from the program explaining the steps older workers must take to enroll once they leave their jobs.
Tiny Tax Moves Can Save You Big on Medicare Premiums
Now is a good time for higher earning Medicare recipients to check whether a small reduction in this year's income could make a big difference in future premiums. Here’s why. Medicare premiums are based on income, and the formulas have “cliffs” that can raise premiums steeply if income rises by even one dollar. In addition, there’s a new inflation adjustment for 2020 that complicates the situation.
Maximizing Your HSA
I Have $11,861 Saved in My HSA, But I'm Still Paying Health Expenses Out of Pocket Because I Have Much Bigger Plans for My HSA
If you're someone who can afford to make it work, you may benefit from pairing your high-deductible insurance plan with an HSA. That's what I do — however, I don't use my HSA money to pay for my out-of-pocket healthcare costs. I have much bigger plans for those funds. By maxing out my account and investing the balance, I'm hoping to grow a decent-sized nest egg for the future.
HSA Planning When Both Spouses Have an HDHP
Financial advisors who have married clients with HSAs can employ some strategies to maximize the value of their clients’ accounts. For example, it may behoove the couple to maximize contributions to the older spouse’s account first in order to reduce the potential exposure to the 20% penalty for non-qualified withdrawals, since the penalty will not apply to the age 65+ older spouse.
Consumer-Driven Health Care
U.S. Household Spending on Health Care Tops $1 Trillion in 2018 for First Time
American households spent more than $1 trillion on health care in 2018, reaching a pricey milestone, according to federal data released December 5. That includes out-of-pocket expenses for medical services and premiums for employer coverage, individual policies and Medicare, as well as Medicare payroll taxes. The figure grew by 4.4% from a year earlier.
Record Percentage of Americans Putting Off Serious Medical Treatment Due to Cost: Gallup
A record percentage of Americans said they are putting off treatment for serious medical conditions, according to a Gallup poll released December 9. 25% of Americans said they or a family member put off treatment for a serious medical condition in the past year. The number of Americans putting off serious treatment increased 6 points from 2018.