HSA News for February 8, 2021
HSA News is compiled weekly by Mr. HSA, Roy Ramthun.
News from Washington
Biden Signals He'll Move Forward on COVID-19 Relief Without GOP
On February 5, President Biden sent his strongest signal yet that he would move forward with his coronavirus relief proposal without Republican support, making the case for the need for his $1.9 trillion package by citing the January jobs report showing a weak economic recovery.
Sen. Warren to Join Finance Panel Overseeing Taxes, Health Care
Sen. Elizabeth Warren (D-MA) will join the Senate Finance Committee, giving her a prominent platform to push forward progressive proposals on tax policy and health care. The Committee has jurisdiction over taxes, trade policy, health insurance, Social Security, Medicare, and Medicaid.
Sen. Cassidy’s Bipartisan Bill Gives Patients ‘Power to Take Control’ of Healthcare Decisions
On January 28, U.S. Sen. Bill Cassidy (R-LA) sponsored a bipartisan bill to expand patients’ access to their primary care providers and decrease the cost of healthcare by allowing health savings accounts to be used for direct primary care arrangements.
Texas Lawmakers Introduce Healthcare Legislation to Cut Red Tape and Bolster Health Savings Accounts
Sen. Ted Cruz (R-TX) and Rep. Chip Roy (R-TX-21) introduced two healthcare bills in their respective chambers this week.The first augments Health Savings Accounts, expanding access to patients who do not have a high-deductible plan and for government-run insurance recipients such as CHIP, Medicare, Medicaid. Patients with coverage outside of the insurance-based system could also open HSAs.
Bid to Add Supplements to HSA Eligibility List Fails in Senate
A move to allow Health Saving Accounts funds to be used to pay for dietary supplements failed along with hundreds of other riders attached to a Senate budget resolution. The HSA amendment was put forward by Sens. Mike Lee (R-UT) and Tim Scott (R-SC) and is similar to a standalone bill introduced in 2020 by Sen. Kevin Cramer (R-ND).
HSA Studies & Analysis
HSA Balances, Contributions, Distributions, and Other Vital Statistics from the EBRI HSA Database
A new EBRI study exploring the savings, spending, and investment behavior of employees owning HSAs finds the average HSA balance in 2019 grew to $2,672 from $2,187 in the beginning of the year. The average balance increase was even larger when analyzing only accounts that had received either an employee or employer contribution in 2019 ($2,232, increasing to $3,055).
Some Participants Reducing 401(k) Contributions to Contribute to HSAs
More than half of 401(k) participants reduced their retirement plan contributions in the first year that they made HSA contributions, according to a study by the Employee Benefit Research Institute. EBRI found that the “crowding out” of HSA savings on retirement savings was modest at the median. The results of the survey highlight the need for retirement plan participants to establish a savings hierarchy.
Devenir's Credit Union HSA Update
According to Devenir, total HSA assets held at credit unions totaled $1.9 billion as of 9/30/20, up 9.7% year-over-year. There were 864 credit unions holding HSA assets (16% of credit unions), up from 841 credit unions three years ago. 44 credit unions each held at least $10 million in HSA assets.
Best Health Savings Account Providers
With an HDHP comes the opportunity to select one of the best HSA providers, and we’ve compiled the details you need to select one for yourself or your business. Keep reading to find out how you can choose the best company that will allow you to earn tax-free interest on your investment.
HSA Compliance Corner
State Initiatives May Affect Residents' Eligibility to Open and Fund HSAs
There's always a risk that state lawmakers and regulators pass legislation or regulations that interfere with federal requirements for HSA-qualified health insurance plans. When there's a conflict, state actions may disqualify residents from opening and funding HSAs.
Remove Contributions to Your HSA? Maybe Yes, Maybe No
You can withdraw excess contributions to your Health Savings Account but you need to take care of this before the deadline. You can't correct contributions that aren't greater than your deposit limits. But you can always reimburse qualified expenses that you didn't reimburse previously.
HSA Industry Best Practices
2 Checklists to Help Employees Get the Most from Health Care Benefits
HR teams do an excellent job of getting employees signed up for health insurance, but helping employees understand how their benefits work—and reminding them how to use them throughout the year—often receives less time and attention. So what can HR teams do to help employees take full advantage of their benefits?
The HSA Market
HSAs, an Adviser Favorite, Just Don’t Get Much Love
Health savings accounts are one of the top recommendations advisers make for clients, but the savings vehicles are scarcely used — and when they are, they are almost always treated like checking accounts.
But they are also kneecapped by their pairing with high-deductible health plans, which are not always optimal for people who regularly anticipate big medical bills.
Health Care Costs Continued to Rise in 2020
A new report from Lively finds that health care costs continued to rise at a faster pace than inflation between 2019 and 2020. HSAs are an optimal vehicle to save for health care costs in the short-term and in retirement, yet higher health costs in the U.S. force many people to spend the money in their HSA accounts—not save it—and can put retirees futures at a risk.
HSAs & Retirement
Have a 401(k) and HSA? Don't Make This Mistake
Here's why you shouldn't use your HSA as an excuse to cut back on 401(k) contributions. For one thing, 401(k)s let you tap your savings sooner without penalty. You can access the money in your 401(k) beginning at age 59 1/2, which is a good thing if you end up retiring early. While it definitely pays to contribute to both a 401(k) and an HSA, the latter shouldn't come at the expense of the former.
Maximizing Your HSA
Are You Making the Most of Your HSA?
Used properly, an HSA can save you a lot of money on taxes and ensure you're prepared to handle an emergency medical bill or medical expenses in retirement. Unfortunately, the vast majority of people eligible to contribute to an HSA aren't taking full advantage of the opportunities it presents.
How HSAs Can Make You Healthier and Wealthier
Health Savings Accounts don't just benefit your wallet. Knowing that you're financially liable for your health care costs can encourage healthy living. HSAs can also be used for some wellness programs and alternative medicine practices that traditional insurance policies don't always cover.
Other Uses for Health Savings Accounts
Here are some other uses for health savings accounts that you may not realize. No permission or authorization from the IRS is necessary to establish an HSA. The HSA can be established through a trustee that is different from your health plan provider.
Mr. HSA on the Tax-Time (and Anytime) Benefits of an HSA
Roy Ramthun has educated thousands of people on how to make the most of this unique account. We thought it would be great for you to hear what Ramthun thinks of HSAs two decades on and what he thinks you should know about them as another tax return deadline approaches.
Consumer-Driven Health Care
Most Americans ‘Completely Lost’ When It Comes to Health Insurance
Over half of Americans are hopelessly confused by health insurance, so much so that the average American earns a D-grade for their knowledge of the topic, according to a recent survey commissioned by Bend Financial. Sadly, 65 percent said an HSA and FSA are the same thing.