HSA News for May 24, 2021
HSA news is compiled weekly by Mr. HSA, Roy Ramthun.
News from Washington
Medicare for 60-Year-Olds Not Guaranteed to Be a Better Deal
President Joe Biden and progressive Democrats have proposed to lower Medicare’s eligibility age to 60, to help older adults get affordable coverage. But a new study finds that Medicare can be more expensive than other options, particularly for many people of modest means.
HSA Studies & Analysis
Employees More Engaged With HSAs Over the Past Year
An analysis by Bank of America shows the average balance in HSAs increased 17% last year, with employee contributions jumping 10% from 2019. Bank of America HSA participants have an average balance of $3,398, which the firm says is 25% higher than the national average. The data also shows 35% of HSA balances were saved for future use.
HSA Compliance Corner
US Preventive Services Task Force Recommends Colon Cancer Screening Starting at Age 45
Americans should begin getting screened for colon cancer at age 45, rather than the previously recommended age of 50, according to updated guidelines from the U.S. Preventive Services Task Force. With the backing of the influential task force, colon cancer screenings for people starting at age 45 will soon be required to be covered with no copay by most private insurance companies.
HSA Industry Best Practices
Advisors Urged to Focus on Healthcare as Pandemic Recedes
Financial advisors can add value to their practices by helping to craft HSAs for employers. Advisors can prompt employers to consider the right questions before adopting an HSA for the employees. The first step is to encourage employers to define what the company’s goals are, which should include helping employees manage health expenses and accelerating employees’ retirement readiness.
The HSA Market
What Uber Can Teach Healthcare
Uber (with Lyft and others) shook the taxi industry to the core. Pre-2009, Uber would have been impossible. But in the 2010s, a variety of factors made ride-sharing possible and irresistible. Healthcare in 2021 is at a similar inflection point. The case for uberizing healthcare is compelling. Traditional healthcare will resist, as traditional taxis resisted Uber. The outcome is likely to be—and ought to be—similar.
JPMorgan Takes Another Crack at Healthcare, Starting with Its Own
JPMorgan Chase & Co. is trying again to transform U.S. healthcare, just months after ending a joint venture with Amazon and Berkshire Hathaway that was supposed to do the same. The nation’s biggest bank is building a new unit that will work on health initiatives for its employees and invest $250 million in startups and technologies meant to make their healthcare more efficient and effective.
HSAs & Retirement
Do Poor Coverage Decisions Affect Employees' Retirement Preparedness?
Workers don't think much about how their choice of medical coverage affects their retirement savings. But perhaps they should. Voya Financial recently published an interesting white paper that addresses how the choice of a medical plan affects retirement readiness. The study provides important information for employers, benefits advisors, and employees.
Maximizing Your HSA
30 Million Savers Now Use This Tool — Are You Missing Out?
The number of HSAs held by Americans continues its slow and steady march upward, reaching 30 million at the end of 2020. As the years pass, more people are likely to jump aboard the HSA bandwagon. Even if you can’t manage to keep from withdrawing funds from your HSA annually, it’s likely worth it for you to become the next person to take advantage of this tool.
Withdraw Funds Tax-free for a Vacation? Possibly! Here's a Hack.
No, you can't withdraw HSA balances tax- and penalty-free to pay for non-qualified expenses. But there's a legal back door, thanks to the flexibility of these accounts. Let's examine how you may be able to pay your travel agent directly from your HSA without taxes or penalties applied.
When to Use an IRA to Fund Your HSA
If you qualify for an HSA and want to fund it but are short of funds, you might be able to fund the HSA from your IRA using a qualified HSA funding distribution (QHFD). In a QHFD, an individual has funds transferred (or rolled over) from an IRA to an HSA tax-free. So, you’re able to move funds from your IRA to the HSA, which has even better tax benefits than the IRA.
Consumer-Driven Health Care
High-Deductible Health Plans: Don’t Let the Name Scare You Off
In order to understand the financial impact of enrolling in a plan that isn’t the right fit, Voya Financial teamed up with SAVVI Financial to conduct an analysis to see how employees would have fared financially if they had an “average” PPO or HDHP. They found that — across a variety of age ranges — the HDHP would have been a better financial choice.