HSA News for February 15, 2021
HSA news is compiled weekly by Mr. HSA, Roy Ramthun.
News from Washington
House Panel Advances Bill to Boost ACA Subsidies as Part of COVID-19 Relief Package
On February 11, the House Ways and Means Committee voted 24-18 along party lines to approve a section of a $1.9 trillion COVID-19 relief package that includes new subsidies for exchange plans under the Affordable Care Act. The legislation now moves to the House Budget Committee, which will roll it into the final package and send to the House floor.
HSA Studies & Analysis
An Uneven Year for HSA Spending: Doctor Visits Down, Prescription Costs Up
A recent report by Lively Inc. found some interesting shifts in health care spending from 2019 to 2020. Health Savings Account spending went up, likely due to COVID-19. Spending on drugs and chiropractic care rose, while office visits, hospital visits and dental care declined.
HSA Industry News
WEX Signs Definitive Agreement to Acquire Certain HSA Assets of HealthcareBank
On February 11, WEX Inc. announced the signing of an agreement to acquire certain HSA assets of HealthcareBank, the custodian bank for customers of WEX’s Health division. The transaction is expected to close in the second quarter of 2021, subject to regulatory approvals and other customary closing conditions.
The HSA Market
HSAs: Find Out What's New, and 12 Best Accounts for 2021
Rarely has health care been more top of mind than now, as Covid-19 ravages the U.S. and hospital costs shoot up. An HSA could help pay for those costs, and knowing what the best HSA accounts are for your particular situation could help you get the most benefit possible.
HSAs & Retirement
How to Add 37% to Your Tax-Free Retirement Contributions This Year
After a year of economic uncertainty due to COVID-19, where 31% of households withdrew money from their 401(k) and 27% borrowed against it, perhaps now is a good time to discuss complementing that approach to combat increasing retirement concerns and the retirement funding gap of employees. Rethinking the positioning of HSAs can help.
What Are the Odds?
A new analysis by the Employee Benefit Research Institute suggests that contributions to HSAs could be “crowding out” contributions to 401(k)s. It’s a conclusion that runs counter to the prevailing body of research on the subject.
401(k) Contributions 'Crowded Out' by HSAs—Does It Matter?
According to new research by EBRI, HSA contributions by first-time HSA participants "crowd out" 401(k) contributions. While this could mean employees with both accounts are likely to have smaller retirement nest eggs, that needn't be the case if at least some of their HSA dollars are used for long-term savings rather than short-term spending.
Maximizing Your HSA
Use Your HSA to Potentially Reduce Your 2020 Tax Bill. Here's How.
Tax season is upon us again. The good news? The dollars you didn’t spend on great adventures in 2020 can earn you great savings on your 2020 tax bill. Add a little or add lot to your HSA, right up to the IRS allowable maximum. It’s a smart, practical way to save on taxes today while also setting aside funds for future medical expenses.
Don't Divert 401(k) Deposits to Your HSA. That May Cost You Dearly!
If you have the knowledge and discipline to integrate your Health Savings Account into your long-term retirement savings goals, you will be that much further ahead in planning for your retirement. When deciding how much to allocate to each option, remember that HSAs provide tax advantages that other retirement plans simply can't match.
HSA Investment Advice: Spending vs. Investing Your HSA Funds
If you're unsure whether to spend or invest your HSA funds, you're not alone. Only 5% of HSA holders invest at least a portion of their funds, according to Devenir. One reason people don't invest HSA funds is they need the money to pay for medical expenses. But for those who don't, a lack of understanding about their investment options could be holding them back.
The Arguments Against Investing HSA Balances. And the Counterarguments.
Depending on the survey that you read, between 4% and about 8% of HSA owners are investing a portion of their balances. Why don't the other 90%-plus of HSA owners invest at least a portion of their balances in investments to build medical equity? Let's look at some common explanations.
Use HSAs to Maintain the Health-Wealth Connection
Anyone who plans to retire must also plan for the inevitable healthcare costs that come with aging. One way financial advisors can keep clients on track for their retirement planning is by taking advantage of an underused and underexplained financial tool known as Health Savings Accounts.
Consumer-Driven Health Care
Deloitte: Greater Consumer Agency Will Decelerate Healthcare Spending Over Next 20 Years
Healthcare spending is expected to balloon to $8.3 trillion by 2040, which is $3.5 trillion less than a federal government estimate, a new report from Deloitte finds. The report says that consumers will take a more active role in their healthcare and therefore help curb spending, including by getting early signals of disease and addressing them proactively, according to the report released February 8.
Let Patients Manage More of Their Own Health Care Dollars
HSAs, FSAs, and HRAs allow people to make their own decisions about how to use the dollars they spend on health care, rather than conform to the rules of others. We could have all the advantages of all three accounts and none of the disadvantages if we combined them into one, easy-to-use account, with very few restrictions.