HSA News for February 12, 2024
HSA news is compiled weekly by Mr. HSA, Roy Ramthun.
News from Washington
IRS: Maine Taxpayers Impacted by Severe Storms and Flooding Qualify for Tax Relief; Various Deadlines Postponed to June 17
The Internal Revenue Service announced tax relief for individuals and businesses in parts of Maine affected by severe storms and flooding that began on December 17, 2023. These taxpayers now have until June 17, 2024, to file various federal individual and business tax returns, make tax payments, and make 2023 contributions to their IRAs and HSAs.
IRS: West Virginia Taxpayers Impacted by Severe Storms, Flooding, Landslides and Mudslides Qualify for Tax Relief; Various Deadlines Postponed to June 17
The IRS announced tax relief for individuals and businesses in parts of West Virginia affected by severe storms, flooding, landslides and mudslides that began on August 28, 2023. These taxpayers now have until June 17, 2024, to file various federal individual and business tax returns, make tax payments, and make 2023 contributions to their IRAs and HSAs.
Florida Congressman Buchanan Proposes Tax-Free Health Savings Accounts for Caregivers
Florida Republican Congressman Vern Buchanan is introducing legislation that would allow individuals to use HSAs and health FSAs on medical expenses for their parents and loved ones. As it stands, caregivers are unable to take advantage of these tax-free accounts unless their parents are classified as dependents for tax purposes.
HSA Studies & Analysis
Americans Saving More in 401(k)s and HSAs
A new report from Bank of America reveals that average 401(k) account balances rose 15% in 2023 compared to the end of 2022. The report also found improvement with HSA balances, rising 11% from 2022 to 2023. In addition, nearly 4 in 10 HSA account holders contributed more than they withdrew, and Millennials saved more of their HSAs than other groups.
HSA Compliance Corner
Domestic Partners and HSAs: Understanding How They Mix
The Supreme Court rewrote the rules on same-sex marriage nearly a decade ago, but the question of domestic partners and their annual maximum contributions to an HSA still lacks formal guidance. Here's which areas of HSA law as applied to domestic partners are clear, which aren't, and what's being said and done in the vacuum.
Can a Non-Compliant HRA Be Paired with an HSA Plan?
Employers are not required to offer a Health Savings Account program along with an HSA-qualified health insurance plan. Some companies purchase a lower-premium HSA-qualified plan but fund an HRA (instead of an HSA) with the additional premium savings. The HRA disqualifies the employees from opening and funding an HSA except in certain circumstances.
HSA Best Practices
4 Things Employers Must Do to Keep Current on HSA Rules and Regulations
While employees have control of their own HSAs, employers still have responsibilities, too. Employers that contribute to their employees' HSAs have four responsibilities, including monitoring contributions, satisfying comparability rules, determining which financial organizations to work with, and meeting reporting requirements. Let's unpack each of them.
HSAs & Retirement
Will Medicare Cover 100% of Your Healthcare Needs in Retirement? Not Even Close
Recent TIAA data reveals that among current retirees, 10% expect Medicare to cover 100% of their healthcare costs. Among those not yet retired, 12% anticipate Medicare picking up 100% of their healthcare tab. But Medicare won't come close to paying for 100% of your medical needs. And the sooner you recognize that, the sooner you can begin to plan accordingly.
77% of Older Americans Worry About Paying for Healthcare Expenses in Retirement. Funding This Account Could Help in a Big Way.
There's one expense that tends to rise during retirement instead of fall, and it's healthcare.
It's not surprising, then, to learn that 77% of older Americans worry about paying for healthcare during their senior years, according to a recent survey. If you share that concern, there's one specific account it pays to fund during your working years if you can--a Health Savings Account.
Maximizing Your HSA
Can You Pay Medicare Premiums From Your HSA?
There seems to be a lot of confusion about whether you can pay your Medicare premiums from your HSA. Once you've turned 65 and enrolled in Medicare, you can use HSA money tax-free to pay premiums for Medicare Part B and D. Medicare Advantage plans are also eligible for reimbursement. However, premiums for Medicare supplement policies are not eligible.
HSAs and Medicare: Using an HSA to Pay for Medicare Premiums
After you enroll in Medicare, you’re not allowed to make any future contributions to a Health Savings Account. But there’s good news. You can withdraw funds tax-free from your HSA to pay for qualified medical expenses even after you enroll in Medicare. You can even use your HSA to pay for some Medicare expenses including your Medicare premiums, deductibles, copays and coinsurance.
HSA Contributions for Adult Children on Your Health Plan
Did you know that your adult child on your healthcare plan might be able to contribute to their own HSA? Many understand the tax advantages of employing an HSA for themselves or their family, but few know how it can be used for an adult child. Check the rules to see if your adult child can open their own HSA.
Consumer-Driven Health Care
HSA vs. PPO: What Are They, and Are They Right for You?
When it comes to choosing a health insurance plan, the many options can be downright confusing. Two options you’re likely to encounter are an HSA and a PPO. Each has its benefits and limitations, and the best choice for you depends on your health care needs, financial situation and preference for flexibility in choosing health care providers. Here’s a breakdown on these plans are and who might benefit from them.
Report: Most Americans Don’t Know How Much Their Health Care Costs
Fewer than 20% of adults in the United States know the cost of their health care products or services before receiving them, and almost all of them believe health care organizations need to make costs more transparent. What’s more, only about 3 in 10 American adults feel those costs reflect the quality of the products and services they receive, according to a new report.