HSA News for May 8, 2023
HSA news is compiled weekly by Mr. HSA, Roy Ramthun.
News from Washington
IRS Announces Tax Relief for Victims of Severe Storms, Tornadoes and Flooding in Florida
Victims of severe storms, tornadoes and flooding in Florida from April 12 to April 14, 2023, now have until August 15, 2023, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced. Among other things, this means that eligible taxpayers will have until August 15 to make 2022 contributions to their IRAs and HSAs.
IRS Announces Tax Relief for Victims of Severe Winter Storms, Straight-line Winds, Flooding, Landslides, and Mudslides in California
Victims of severe winter storms, straight-line winds, flooding, landslides and mudslides in California that began on February 21, 2023, now have until August 15, 2023, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced. Among other things, this means that eligible taxpayers will have until August 15 to make 2022 contributions to their IRAs and HSAs.
HSA Compliance Corner
It's Health FSA-HSA Alignment Conundrum Season!
HSAs and general Health FSAs offer similar tax benefits. But offering both becomes problematic when the plans don't renew at the same time. This misalignment creates problems at the group level when the HSA is introduced and in every subsequent year that employees have a choice of at least one medical plan in addition to the HSA-qualified option. What is the problem? What steps can an employer take to resolve the issue?
IRS Reconfirms Prohibition, Consequences of Health FSA and DCAP Substantiation Shortcuts
The IRS Chief Counsel’s office has released a memorandum that addresses the substantiation requirements for medical and dependent care expenses and the consequences of various substantiation shortcuts. The memo reconfirms that medical expense reimbursements from a health FSA are included in an employee’s gross income if the health FSA fails to fully substantiate any expense of any employee in accordance with IRS rules.
HSA Best Practices
How Can Companies Help Workers with Early Expenses?
Many new Health Savings Account owners don't have the account balances or personal resources to cover a high expense early in their first year of ownership. Fortunately, employers can offer a variety of programs to minimize this concern and drive greater adoption. Employees that have access to or use these programs remain eligible to make and receive contributions to their HSAs. And they still enjoy tax benefits on distributions.
HSAs & Retirement
Retirement and Health Care Costs: What You Need to Know
As a general rule, planning ahead for health care expenses in retirement is important. At the same, there are a variety of factors to consider when determining how much you’ll need. In addition to your income and age, your health, where you live, and whether you have Medicare or supplemental insurance, your costs may vary.
Consumer-Driven Healthcare
Healthcare Costs Continue to Rise – Even Without Factoring in Inflation: Report
Medical costs for employer-sponsored plans for 2023-2024 are projected to continue to rise, according to a recent report from the Buck consulting firm. This is the case even though medical trend factors have yet to fully adjust for recent inflationary increases in other goods and services.