HSA News for April 25, 2022
HSA News is compiled weekly by Mr. HSA, Roy Ramthun.
News from Washington
Democrats Prepare to Take Second Run at Biden Spending Plan
Top Democrats and the White House are eyeing a revival of a stalled-out tax-and-spending bill as the party tries to show deliverables to voters heading into a November election where they are facing tough political headwinds. Democrats are signaling they want to turn back to the Build Back Better spending plan even as they face many of the same hurdles and intraparty tensions that plagued the 2021 talks.
Bill Seeks to Expand HSAs to Seniors Covered by Medicare
Representatives Ami Bera, (D-CA) and Jason Smith (R-MO) recently reintroduced bipartisan legislation that would allow seniors covered under Medicare to continue using or create new HSAs. Many Americans who have established HSA accounts think that they can continue funding the HSA past enrollment in Medicare and are often surprised to find out they can’t under current law.
HSA Compliance Corner
Post-Deductible Specialty HRAs Preserve HSA Eligibility
How can employers offer infertility and other specialty HRAs without causing employees enrolled in the HDHP to lose HSA eligibility? The most common strategy for preserving employees’ HSA eligibility is to offer a post-deductible HRA option for HDHP participants. Under this approach, the HRA will not cover any expenses incurred prior to the employee satisfying the statutory minimum HDHP deductible.
HSA Industry Best Practices
5 Ways HSAs Can Help Employees Plus Attract and Retain Top Talent
In the age of the Great Resignation, companies can further round out their benefits package by offering Health Savings Accounts (HSAs) to help keep productive employees and recruit talent. While retirement accounts remain integral to an employee's overall financial picture, HSAs also represent a financial opportunity for employees and employers alike. Here are five ways HSAs can help your employees.
The HSA Market
2022 HSA Conference: An HSA Overview
A panel of experts assembled for the first session of the 2022 Plansponsor/Planadviser HSA Conference discussed the most important HSA features and the complex taxation and spending rules governing their use. Beyond covering such topics as eligibility requirements, tax treatment rules and allowable expenses, the speakers also discussed recent regulations and legislation related to HSAs.
2022 HSA Conference: HSA Education and Communication
Without significant education, many employees do not understand their HSA benefits. They often get them confused with FSAs, or they fail to see how HSAs could affect their own circumstances with regard to financial wellness and retirement savings. This was the conclusion of a panel of industry experts at the 2022 Plansponsor/Planadviser HSA Conference, which discussed the “what,” “how” and “when” for HSA education and communication.
2022 HSA Conference: Creating the Optimal Plan Design
According to industry experts at the 2022 HSA Conference, when plan sponsors are designing an HSA program, they must consider the risks and benefits of auto-enrollment for employees who have high-deductible health plans, and the questions of whether to include an employer contribution to workers’ HSAs and whether to provide account holders the option to invest contributions for long-term growth.
2022 HSA Conference: Choosing the Best HSA Service Provider
There are several capabilities and features employers should consider when selecting a health savings account provider. Plan sponsors can focus on certain essential health savings account features and capabilities when working with providers to build a program for employees.
HSAs & Retirement
Medicare’s Tricky Rules on HSAs After Age 65
It is becoming more and more common for folks to continue working at and after the age of 65. After all, full retirement age under Social Security is 67, not 65. It is possible to stay covered under your large company's health insurance. In this case, it would be possible to continue contributing to an HSA over the age of 65. Many people may choose this option because of the tax efficiency of the HSA.
Bill Would Extend HSAs to Seniors, Provide Huge Benefit at Small Cost
Reps. Ami Bera (D-CA) and Jason Smith (R-MO) have reintroduced legislation to extend Health Savings Accounts to Medicare enrollees. The Bera-Smith bill redefines Medicare as HSA-qualified coverage, so anyone enrolled in Medicare is eligible to open and fund a Health Savings Account. And anyone who's already contributing to a Health Savings Account won't be disqualified from future funding.
Inflation Is Impacting Health-Care Costs in Retirement. Here’s How to Fight It
Studies illustrate how increasing medical expenses can add up. If health-care costs grow at 2% above consumer inflation for the next two years, a healthy 55-year-old couple could face $267,000 in additional medical costs when they retire at age 65. That same couple could expect to spend more than $1 million on health-care expenses in their lifetime. HSAs are one tool to save for future health-care costs.
Maximizing Your HSA
Health Savings Accounts: a Best-Kept Secret?
I find that people may have a decent understanding of a Health Savings Account, but they may not fully be aware of all the advantages that go along with using one. Once you fully understand them, it’s clear to see why an HSA could be such an attractive option for those who qualify to use one.
Can Medicare Premiums Be Paid from HSA?
HSAs can be used to pay Medicare premiums, including Medicare Part A premiums (if they apply), Medicare Part B premiums, Medicare Part C premiums, and Medicare Part D premiums, as well as deductibles for all parts of Medicare, copayments and coinsurance costs for all parts of Medicare, dental expenses, vision expenses, insulin and diabetic supplies and over-the-counter medicine.
DUDE Wipes and Male Menstruation? What Does the Federal Tax Code Say?
Sometimes new product concepts and new ideas challenge the imagination - and the federal tax code. The creativity of entrepreneurs and thought leaders always outruns those who are trying to apply these innovations and new ideas to the federal tax code. It's difficult for the tax code and the IRS to respond to new challenges, as witnessed by these two unique examples.
Consumer-Driven Health Care
Pros and Cons of HSAs
HSAs present nearly unmatched tax advantages over other savings tools, and can help significantly to pay for future medical costs. They are portable, don't expire and can be used to pay for many health-related expenditures. However, people have to join high-deductible health plans that expose them to potentially steep healthcare bills. And penalties are severe for non-qualified withdrawals.
What If Health Insurance Were Like Car Insurance?
Health insurance should be like auto insurance. You pay for the small stuff, the trips to doctor, routine medication, eyeglasses, etc. Insurance would be for things beyond your control, say accidents or serious infections. This model is similar to a high-deductible insurance plan, the kind many self-employed individuals purchase. Making health insurance like car insurance won’t fix everything, but it is a step in the right direction.