HSA News for June 15, 2020
HSA news is compiled weekly by Mr. HSA, Roy Ramthun.
News from Washington
Republicans Prepare to Punt on Next COVID-19 Relief Bill
Republican senators are leaning into their go-slow approach on the next coronavirus bill. Bolstered by last week’s unexpectedly positive jobs report, Senate Republicans are signaling they will not pass another bill before late July. They have also flatly rejected the $3 trillion price tag of the bill passed last month by House Democrats.
Hoyer: House Will Vote Soon on Bill to Improve Obamacare
The House will vote the week of June 29 on a bill aimed at improving the affordability of plans under Obamacare, House Majority Leader Steny Hoyer (D-MD) said June 11. The exact details of the measure are not yet clear. The measure is not likely to go anywhere in the Senate, given the Republican opposition to the ACA.
IRS Proposes Regulations on Direct Primary Care, Health Care Sharing Ministries
On June 8, 2020, the IRS issued a proposed rule that defines fees for direct primary care and for health care sharing ministries as payments for medical care or medical insurance, which makes them eligible for a tax deduction as qualified medical expenses. The proposed rule would go into effect for the next tax year after the publication of the final rule.
HSA Compliance Corner
Can't Get Out of Health FSA to Open an HSA? Usually True, But . . .
HSA experts have preached for years that Health FSA participants can't disenroll from that program mid-year. But for a limited time, they now can. Guidance issued last month by the IRS allows employers to offer employees a special mid-year enrollment period during which they can prospectively enroll in, disenroll from, or change their election to their Health FSA.
More on the Last-Month Rule: Assessing the Net Risk
Funding your HSA more than the pro-rata amount when you become eligible to contribute mid-year involves some risk, but account owners can manage that risk to secure the financial benefits. The "last-month rule" is a risk-reward proposition. But all you really risk at the end of the day is the 10% penalty on excess contributions.
Mandatory HIV Drug Coverage with Employer Health Plans
With renewals effective July 1, 2020 and after, health plans will be required to cover the costs of HIV pre-exposure prophylaxis (PrEP) drugs to prevent the transmission of HIV infection. It’s not very often that new drugs are added to the preventive services list under the ACA with no co-pay, co-insurance or deductible. This addition was recommended in June, 2019 by the U.S. Preventive Services Task Force.
HSAs & Retirement
Your Health Savings Account Is a Retirement Planning Tool
Health care represents a prominent category of spending for those in retirement. Even with Medicare, you likely will need to pay various medical costs out of pocket. While you can tap your retirement savings to help meet those needs, there is another source of funds — your HSA. You may be surprised to learn that it could play an important role in your retirement.
Post Covid-19, Here’s How Americans Are Saving for Healthcare in Retirement
A recent study investigated how Americans from different age groups and income levels were preparing not only for retirement, but for the future expenses of health care, and the results were alarming. The biggest finding: Americans are incredibly unprepared. And only 38.1% were specifically saving for the cost of health care in retirement.
Maximizing Your HSA
New HSA Account Rules
HSAs have always offered a valuable triple tax break. And recent changes to the rules and timely strategies make HSAs an even more important financial-planning tool. Plus, a special strategy can help expand the HSA's tax benefits even further – helping it serve as an emergency fund or source of tax-free money in the future. Here are the new rules and strategies to make the most of these accounts.
Consumer-Driven Health Care
Can Prescription Discount Services Really Help You Save Money at the Pharmacy?
A trip to the pharmacy can cause serious sticker shock. To combat the increasing costs, a number of prescription discount services have popped up in recent years, claiming to save customers up to 80% at the pharmacy. Here are the benefits of prescription discount services, as well as some potential downsides you should be aware of.
Rapid Changes to Health System Spurred by COVID Might Be Here to Stay
The U.S. health care system is famously resistant to government-imposed change. But the COVID-19 pandemic has done what no president or social movement or venture capitalist could have dreamed of: It forced sudden major changes to the nation’s health care system that are unlikely to be reversed.