HSA News for August 7, 2023
HSA news is compiled by Mr. HSA< Roy Ramthun.
HSA Studies & Analysis
Fidelity: Health Savings Accounts - 2023 Key Insights
According to a recent Fidelity survey, 22% of consumers have recently used an HSA to pay health-related bills. While HSAs are only one piece in the puzzle of paying for health care, they can be a valuable tool to manage current health costs and plan for the future. Consider the following HSA trends to help employees get the most out of their health benefits in 2023.
HSA Compliance Corner
How Do Breaks in HSA Eligibility Affect Your Establishment Date?
You can't reimburse tax-free any expenses that you incur before you establish a Health Savings Account. All qualified expenses with dates of service on or after that date are qualified for tax-free reimbursement as long as you maintain a continuous balance (or spans of zero balance that don't exceed 18 months) between periods of eligibility to fund an HSA.
Here's What Happens if You Take an HSA Withdrawal for a Non-Medical Purpose
HSAs allow you to reimburse or pay for medical expenses tax-free, but if you take an HSA withdrawal for non-medical reasons and you're not yet 65, you'll be taxed on the money you remove from your account. You'll also face a 20% penalty on the sum you remove. At 65, the penalty goes away but you will stall be taxed on the withdrawal.
Industry Best Practices
Identifying the Best Approach to Cover Chronic Care with HSAs
The prescriptive approach to HSA-qualified plan designs leaves little room for value-added coverage for chronic conditions below the deductible. What's the best approach? Adding flexibility to the design of HSA-qualified coverage would allow more Americans to retain more their earned income to pay for medical care tax-free through Health Savings Accounts.
Using Benefit Accounts to Support the Work-Life Relationship
Employees who struggle to balance their work and personal lives can suffer from health issues, poor job satisfaction, exhaustion, burnout, and problematic behavior on the job. Brokers and TPAs can help by offering different benefit accounts, like lifestyle spending accounts for various wellness expenses, dependent care FSAs for child care expenses, and HSAs for retirement and financial peace of mind.
HSAs & Retirement
HSAs: The Ultimate 401(k) Supplement
Health issues can arise at any time, and during retirement, many turn to their 401(k) for the funds to address them. But HSAs are another option and are ideal for health care expenses in retirement. HSAs can help preserve balances in other retirement accounts by reducing the number of hardship withdrawals that might otherwise be taken from if an emergency occurs.
Should You Try This Retirement ‘Cheat Code’ That Could Beat a 401(k)?
Since its tax advantages are so generous, some HSA holders have begun using the accounts as supplements to or even replacements for retirement accounts like 401(k) plans. HSAs are the only account that is triple tax-free. In addition, there’s another hidden advantage to contributing to an HSA that many overlook, dubbed the “cheat code” by financial coach Blake Hilgemann.
Can My HSA Take the Place of an IRA?
The money in your HSA can be withdrawn at any time to cover qualified healthcare expenses. But if that HSA is also doubling as your retirement savings plan, and you keep taking withdrawals ahead of retirement, you'll risk closing out your career without having amassed enough money to cover your senior living costs. That's why you're really better off having both an IRA and an HSA.
More Americans Say They Can Never Retire
A growing share of working Americans don’t think they will ever retire, recent surveys suggest. A comfortable retirement requires savings, and many workers fear they don’t have enough. In one poll, 29 percent of workers under 55 answered a retirement query with, “I don’t think I will ever retire.” Asked why not, three-quarters said they could not afford to stop working.
Maximizing Your HSA
Never Opened an HSA Before? Here Are 3 Good Reasons to Start
It's so important to set aside money for medical bills, and while you could always stick more money in the bank, an HSA allows you to save and invest money for near-term and future medical bills. Unlike with an FSA, you don't have to use up your HSA balance every year. If your health insurance plan is compatible with an HSA, then it pays to open one for these key reasons.
How Can High Deductible Health Plans and Health Savings Accounts Reduce My Costs?
High Deductible Health Plans and Health Savings Accounts are components of a healthcare strategy that can potentially reduce your healthcare costs while offering certain tax advantages. Here’s how they work and how they can help you save money.
Can You Have an HSA and FSA at the Same Time?
There are different tax-advantaged accounts you can open to save for medical spending. One such account is a flexible spending account, and another option is a Health Savings Account. You may also be interested in opening an FSA and an HSA. For the most part, you can only have one at a time -- but there is an exception to that rule.
Consumer-Driven Health Care
National Panel Will Explore Requiring Free Covid Tests
The U.S. Preventive Services Task Force will discuss recommending Covid-19 screening, the first step in requiring insurers to permanently cover the tests at no cost to patients. All public and private insurers were required to cover Covid tests at no cost during the public health emergency. But since the emergency ended more than two months ago, several large insurers have limited coverage of at-home tests or introduced copays on lab tests.