HSA News for January 16, 2024
HSA news is compiled weekly by Mr. HSA, Roy Ramthun.
News from Washington
House Members Join Calls to Withdraw DOL Fiduciary Proposal
A bipartisan group of 50 U.S. House members wrote to the Department of Labor in opposition to the administration’s retirement security rule proposed in October 2023. Lawmakers argued the proposed rule would ultimately harm lower- and middle-income workers by forcing financial professionals who currently operate as insurance agents or registered representatives to act as investment advisers—thus increasing their fees.
House Committee Hears Expert Testimony on Fiduciary Proposal
The U.S. House Committee on Financial Services’ Subcommittee on Capital Markets hosted a hearing on January 10 about the Department of Labor’s fiduciary proposal. The hearing proceeded largely along partisan lines, with Republicans pointing out flaws and Democrats noting merits. The DOL has not yet announced a timetable for finalizing the proposal.
Critics of DOL Fiduciary Proposal Pulling Every Lever to Block Rule
Now that the public comment period on the Labor Deparment's fiduciary proposal has closed, the final rule could be issued within the next several months. With thousands of comments up for review and a potential court challenge, the proposal's fate remains uncertain. Supporters and opponents will continue to press their cases across the three branches of government.
HSA Studies & Analysis
HSA Deposit Rate Update – December 2023
The rapid rise in the federal funds rate over the course of 2022 and 2023 has resulted in continued increases in the average rate paid on HSA deposit balances. As of December 31st, 2023, HSA providers are paying an average rate of 0.42% at the $1,000 balance threshold, and 0.52% at the $10,000 balance threshold, up 8 and 10 basis points from September, respectively.
HSA Compliance Corner
“Mr. HSA” Projects HSA Amounts for 2025
I am projecting that the HSA amounts will see modest increases for 2025 since inflation has moderated somewhat. This is still good news for HSA owners as the contribution limits will rise again for 2025. For HSA-qualified insurance plans, the minimum deductibles and annual out-of-pocket limits will also see minor increases. Look for my final projections for 2025 in April.
Beware Medicare Part A Retro Coverage Across Calendar Years
Most insurance coverage starts with an effective date tied to the date that you pay your first premium, or a specific date set by your employer. But not Medicare Part A. When you apply for this coverage and are ultimately enrolled, your coverage may stretch back a full six months before you applied. This retroactive coverage can negatively impact HSA eligibility. Here's how.
Can Non-Subscribers Open and Fund Their Own Accounts?
I’m enrolled in my spouse’s HSA-qualified plan. Can I open and fund my own Health Savings Account, even though I’m not the plan subscriber? Yes. You do not have to be the subscriber (or the primary policy holder) to be HSA-eligible. It’s common for two or more people – typically spouses – on a family contract to be eligible to open and fund an HSA.
HSA Industry News
Avidia Bank Announces Spark Benefits in Partnership with Lynx, Offering Enhanced Financial Solutions with Expanded Capabilities Beyond HSAs
Avidia Bank released Spark Benefits in a strategic partnership with Lynx. The launch of Spark Benefits provides an enhanced solution that includes expanded benefit accounts beyond HSAs, including lifestyle benefit accounts, individual coverage HRAs (ICHRAs), and all other notional account types.
Market Trends
20 Years of HSAs: Exploring the Evolution to Mainstream Status
Over the last two decades, HSAs have evolved into becoming a core component of benefits offerings that gives employees advantageous tax perks as well as another avenue to invest and pay for medical expenses during retirement. While the last 20 years have marked significant changes for the entire health care industry, the next 20 will continue to see HSAs evolve even further.
US Sets Enrollment Record for Obamacare Plans
More than 20 million Americans have so far signed up for health insurance through the Affordable Care Act's marketplace for this year, the highest since the inception of the law, according to data released January 10. Over 3.7 million people who have signed up for the 2024 plans are new enrollees, data from the U.S. Department of Health and Human Services showed.
HSAs & Retirement
How to Use Your HSA as a Retirement Plan
If you’re looking to maximize your retirement savings, using your HSA could be a wise choice. Not only can HSAs help pay for current medical expenses, but they can also be utilized as a supplementary retirement plan, similar to traditional options like 401(k)s or IRAs. Here’s what you should know about HSAs and how they can be used to boost your retirement savings.
How to Manage Health Care Costs in Retirement
When thinking about retirement, many people fail to properly budget for medical issues that often creep in as we age. Some studies suggest retirees should have $300,000 or more set aside for health care costs during retirement. Here’s how to plan for health care costs during retirement and what you can do today to avoid a major headache down the road.
Maximizing Your HSA
Should You Max Out Your HSA in 2024?
It's important to understand the tax benefits and rules for an HSA. For example, putting money into an HSA is tax deductible up to certain limits. For 2024, the contribution limits are $4,150 for individuals with single coverage, or $8,300 for families. Here are three reasons why making the maximum contribution to your HSA could be a smart move for your personal finances in 2024.
Here's the 1 HSA Mistake You Don't Want to Make in 2024
You may feel compelled to spend all of the money in your HSA this year for fear of forfeiting unspent funds. But HSAs work differently and the funds never expire on you. In fact, HSAs are specifically designed to incentivize savers to keep their balances intact. That's because HSAs let you invest your money and investment gains are yours to enjoy tax-free.
Consumer-Driven Health Care
Americans Overwhelmingly Favor Health Care Price Transparency
Americans are nearly unanimously (94%) in favor of legally requiring health care entities like hospitals, insurance providers and doctors to disclose all of their prices, including discounted prices, cash prices, and insurance negotiated rates, in an easily accessible place online. This result was statistically the same across all demographics and political parties in the U.S.