HSA News for November 25, 2024
HSA news is compiled weekly by Mr. HSA, Roy Ramthun.
News from Washington
Employers and Benefits Brokers Unite to Defend Group Health Tax Exclusion
A coalition of benefits brokers, employer groups and benefits groups is trying to ward off any efforts to weaken the current federal income tax exclusion for employer-sponsored health benefits. The Partnership for Employer-Sponsored Coverage has written to the leaders of the House and the Senate to oppose moves to cap the exclusion.
HSA Studies & Analysis
HSA Growth Continues, With Plan Sponsors Calling for More Education
Employee contributions and average account balances in HSAs continue to creep up, averaging $2,609 in 2023, up from $2,323 the previous year, according to a new report. Similarly, average account balances ended the year at $6,165, reflecting a slight increase from $6,130 in 2022. But only 30% of employers allow participants to view or manage HSA balances through their retirement portals.
Understanding HSA & FSA Trends in Consumer Spending
HSAs and FSAs play a growing role in how consumers manage healthcare costs trickling down to consumer goods and general merchandise. Numerator conducted research on over 2,000 HSA and FSA holders to understand who uses them, the scale of spending they support, which consumers purchase with these funds, and ways for brands and retailers to engage this potentially expanding market.
Compliance Corner
First Dollar Coverage for Telehealth Under High Deductible Health Plans to End
Ever since 2020, HSA-qualified plans have been able to cover telehealth without applying the deductible. This is coming to an end for plan years beginning on or after January 1, 2025. Employers currently providing first-dollar coverage under their health plans need to remove this for their plan years starting on or after January 1, 2025.
How Does Access to or Use of an EAP Affect Your Eligibility to Fund Your HSA?
Employee Assistance Program services typically do not disqualify you from opening and funding a Health Savings Account. More extensive services could disqualify you from an HSA, especially if they are services you would otherwise receive through medical insurance with personal financial responsibility.
How Is HSA Eligibility Affected When a Spouse or Dependent Is Enrolled in Medicare?
If an employee is enrolled in an HSA-qualified plan, does not have any disqualifying coverage, and cannot be claimed as another’s tax dependent, the employee is eligible to contribute to an HSA. This is true even if the employee’s spouse or dependents are enrolled in Medicare, or other disqualifying coverage.
Industry News
Class Action Filed Against Houston Health Savings Account Firm for Allegedly Confiscating Client Funds
A Chicago law firm filed a class action suit in Houston federal court alleging a health services account company (HMA) has been stealing funds from HSA participants. According to the complaint, consumers were told they could draw on their funds using debit cards to pay medical providers and HMA promised to match the amount deposited provided customers agreed to pay a monthly fee to HMA.
Market Trends
Small Businesses Have Dropped Healthcare Coverage Over the Last Three Decades
The percentage of small companies offering health insurance declined dramatically over the last three decades as care costs jumped and other options emerged. The percentage of employers with 25 to 99 workers offering healthcare fell to 77% in 2023 from 81% in 1996, decreased to 52% from 65% among employers with 10 to 24 employees, and to 23% from 34% among employers with fewer than 10 employees, according to EBRI.
Fewer Companies Are Selling Group Health Insurance: Congressional Watchdog
Fewer health insurers are selling U.S. employers coverage, according to a new U.S. Government Accountability Office report. The number of issuers serving large groups in the average state fell to eight in 2022, from 12 in 2011, and the number of states where one issuer hogged at least 80% of the large-group enrollment climbed to 12, from six. The situation was even worse in the small-group market.
Best Practices
More Employers Incorporating Health Savings Account Education
Employers are paying more attention to how they can educate their workers about healthcare and HSAs, according to new research from the Plan Sponsor Council of America. The survey found that employee education and engagement were the top-cited services that employers are looking for from a vendor, with more employers providing this type of education regularly.
HSAs & Retirement
Health Savings Accounts Still an Underused Source of Retirement Savings
HSAs remain an underused retirement savings tool, according to a new survey by the Plan Sponsor Council of America. The report found that less than 19% of participants invested their HSA balances accounting for 25.3% of all HSA assets other than cash. Almost 66% of employers offered investment options in their HSAs, up from 60% in the previous year’s survey.
Are HSA Users Missing Out on Their Retirement Savings Potential?
Despite the benefits of HSAs as tax-advantaged retirement savings tools, employees are largely using them to meet current healthcare expenses, according to the Plan Sponsor Council of America. While 90 percent of eligible employees had an HSA in 2023 and three-quarters made contributions, few are leveraging them for retirement planning.
Maximizing Your HSA
How to Maximize Your Health Savings Account Before the End of the Year
A Health Savings Account is a tax-advantaged account designed to help you save for future medical costs. If you have access to this type of account, it’s a good idea to make the most of the opportunity. Take a look at the key advantages of an HSA and how to maximize your HSA by the end of the year.
Your Health Savings Account Guide for 2025
With the IRS raising contribution limits for the new year, Health Savings Accounts continue to be a powerful tool for managing health care expenses and planning for retirement. This guide will walk you through the essentials of HSAs, their advantages, and strategies to help maximize their potential.
Are You Trapped in Your Employer's Preferred HSA Arrangement? Not by a Long Shot!
Health Savings Account owners typically don't need a second HSA that offers enhanced features and benefits. But if your company's preferred partner falls short, you can reap the full tax benefits of an HSA and enjoy enhanced performance from another HSA by adopting a two-account strategy.
Unlock the Full Potential of Your HSA
Health Savings Accounts continue to become more popular. If you have a qualifying high deductible health plan, you may make deductible contributions to an HSA. Then, you can take tax-free distributions to pay for qualified medical expenses. Here is what you need to know about taking tax-free HSA distributions.
Consumer-Driven Health Care
Health Savings Accounts Are Even More Valuable for Women. Here's Why.
Women generally need healthcare money more than men because they have more expenses and tend to live longer. Fortunately, HSAs can be an especially good deal for women. HSAs let you plan ahead, the money you save is tax-advantaged, and you can invest the money in your HSA for long-term growth, just like an IRA or brokerage account.
Health Prices Are Getting More Transparent, but It's Still Not Enough, Experts Say
Health transparency rules have helped researchers gain more insight into hospital pricing practices. Although transparency is improving, it's still not enough, experts say. In order for something to be 'shoppable,' it needs to be specific, and it needs to be searchable. It needs to be easy. And patients need to have some skin in the game if prices are to come down.