HSA News for October 5, 2020
HSA news is compiled weekly by Mr. HSA, Roy Ramthun.
News from Washington
Senate Passes Spending Bill to Avert Shutdown Hours Before Deadline
The Senate passed a short-term funding bill on September 30 just hours before the deadline to prevent a government shutdown. Senators voted 84 to 10 to keep the government funded at current levels through December 11, setting up another funding fight after the November elections and right before the holidays.
House Approves $2.2T COVID-19 Relief Bill as White House Talks Stall
House Democrats approved a massive, $2.2 trillion package of coronavirus relief on October 1, lending political cover to party centrists in tough races while putting fresh pressure on Senate Republicans to move another round of emergency aid before the coming elections. The vote arrived only after last-ditch negotiations on Thursday failed to yield a bipartisan agreement.
GOP Cool to White House's $1.6T Coronavirus Price Tag
The latest White House coronavirus relief offer, with a $1.6 trillion price tag, received a cool reception from congressional Republicans on October 1. The new offer from Treasury Secretary Steven Mnuchin exceeds the original $1.1 trillion Senate GOP package and the $1.5 trillion the White House signaled it could support last month.
HSA Studies & Analysis
Top 20 HSA Market Concentration
The HSA marketplace consists of providers from a variety of backgrounds. In addition to the wide range of business models, HSA providers come in many sizes as well. Using the Herfindahl–Hirschman Index, we see the HSA industry as highly competitive among the top HSA providers, though growing more concentrated over time.
HSA Industry News
Sterling Administration Offers New Valued-Priced Online HSA Plan
Sterling Administration has launched a new all online HSA plan available for $2.50 per month. The all-electronic HSA is available for individuals and employers and includes no set-up or hidden fees, all online paperwork and live-person customer service.
The HSA Market
HSAs Find New Life in the Gig Economy
At a time when COVID-19 has put healthcare at the forefront of public concerns, neither the pandemic nor politics are likely to slow this sector’s rapid growth, says Sean Engelking, CEO of Starship. In fact, continued medical-cost hikes plus a growing need for individuals and families to pay for rising medical expenses are making the outlook bright.
Strategies Employers Can Utilize to Trim Health Benefit Costs in 2021
As healthcare costs increase, HSA-qualified health plans offer significant savings for both employees and their employers. In 2019, the average HSA-qualified health plan had a 27% lower employee-paid premium than the average HMO plan and a 9% lower annual employer-paid premium. Employees can save additional dollars by using their HSAs to pay for their medical expenses tax-free.
Would HSA Expansion Kill Health FSAs?
With all the benefits of an HSA over a Health FSA, how would Health FSAs fare in a market in which people would no longer have to enroll in a qualified HDHP to own and fund an HSA? But it's not difficult to imagine a world in which Health FSAs more than hold their own even when HSAs are expanded. Here are some reasons why.
Analysis: 'Silver Loading' Led to Exodus to Bronze-Tier Plans in Majority of States
The practice of "silver loading" on the Affordable Care Act’s insurance exchanges has led more consumers to migrate from silver plans toward bronze-tier plans that have lower premiums but higher out-of-pocket costs, a new analysis finds.
HSAs & Retirement
How the Best-Kept Secret of the US Tax Code Can Help You Save for Retirement
This month I was lucky enough to sit down with Jean Chatzky, CEO of HerMoney, to talk about what may be the best-kept secret when it comes to saving money on taxes: Health Savings Accounts. Why is it a secret? Well, it’s technically not. But, the benefits of this account are so great that it almost feels like the IRS made a mistake and wouldn’t want us to know about it.
3 Reasons an HSA Needs to Be Part of Your Retirement Plan
Many people regard HSAs as near-term savings tools. The money you put into an HSA can be withdrawn immediately to cover medical expenses, so you might assume that it's smart to fund your account minimally, take withdrawals as needed, and call it a day. But actually, HSAs can also serve as an important retirement savings tool. Here are a few reasons to fund one for your later years.
Another Tax-Advantaged Option for Retirement Planning
When it comes to saving for retirement, many investors rely heavily on tax-sheltered accounts, like 401(k)s or IRAs, but the account with the most tax advantages may actually be alongside your healthcare coverage. Joining me today to talk a little bit about how HSAs may be useful retirement planning tools is Christine Benz, Morningstar's director of personal finance.
Is This Retirement Account the New 401(k)?
Forget 401(k)s, IRAs and everything you think you know about retirement accounts. The best place to stash your savings isn't a retirement account at all -- it's your HSA. If you don't have one of these, or you don't even know what they are, you definitely want to read this. I'll explain what an HSA is, who qualifies for them, and how you can leverage one to jump-start your retirement savings.
Americans Are Contributing More to Their 401(k)s, but Is That the Best Move?
Putting more money into a 401(k) isn't necessarily always the best way to save more for retirement. For some Americans, there are far better choices. You may be better off diverting some of your additional capital to other tax-advantaged accounts, like an HSA or an IRA.
59% of HSA Participants Are Missing Out on This Important Retirement Strategy
Opening an HSA not only saves you money on taxes, but also helps ensure that you have funds set aside to cover medical expenses. But new data reveals that many HSA participants aren't taking full advantage of their accounts. Specifically, only 41% are using their HSA to save for healthcare expenses in retirement, which means 59% of savers may be missing out on a huge wealth-building opportunity.
PSNC 2020: Considering Health Expenses in Retirement Planning
Speakers at the 2020 PLANSPONSOR National Conference made the case for HSAs, noting that the products can assist with managing expenses and planning for retirement. To start off the panel, attendees were asked whether they currently offer an HDHP with an HSA in their plan design. Seventy percent answered yes, while 10% said no but that they are considering one.
Maximizing Your HSA
HSA Investment Options Fewer Than IRAs? Maybe, but Not by Law
Only about 4% to 6% of HSA owners are investing a portion of their balances in equities. There are many reasons for this low level of investors. But don't blame restrictive laws that limit the number of investment options that an HSA trustee or administrator can deliver to account owners. In fact, they can offer the same range of investments as can IRA providers.
Can You Save Too Much in a Health Savings Account?
Can you overdo your HSA contributions--put more in the account than you're likely to spend on healthcare costs? The short answer is that it's unlikely, largely because HSAs have generous features around withdrawals. In a worst-case scenario where your HSA account balance exceeds your expected healthcare costs, you have two key ways to get your money out sooner without negating the tax benefits of the HSA.
How to Keep Your HSA Forever and Not Switch With Every Job
Whether you’re starting a new job, beginning your own business, going freelance full-time, experiencing unemployment, and/or any of the other career changes life throws at us, your HSA can stick with you no matter what.
Consumer-Driven Health Care
6 HSA-Approved Purchases That Can Help Reduce Employee Stress
With the pandemic raging on — and flu season just around the corner — employees have plenty to be stressed about. But they might be able to find some relief from their HSA dollars. employees can be tapping into their HSA accounts for support for mental health, sleep issues, and even basic hygiene concerns brought on by the pandemic.