HSA News for June 10, 2024
HSA news is compiled weekly by Mr. HSA< Roy Ramthun.
News from Washington
IRS: Kentucky Storm Victims Qualify for Tax Relief; Various Deadlines Postponed to November 1
The Internal Revenue Service announced tax relief for individuals and businesses in parts of Kentucky affected by severe storms, straight-line winds, tornadoes, landslides and mudslides that began on April 2, 2024. These taxpayers now have until November 1, 2024, to file various federal individual and business tax returns, make payments, and make 2023 contributions to IRAs and HSAs.
IRS: West Virginia Storm Victims Qualify for Tax Relief; Various Deadlines Postponed to November 1
The IRS announced tax relief for individuals and businesses in parts of West Virginia affected by severe storms, straight-line winds, tornadoes, flooding, landslides and mudslides that began on April 2, 2024. These taxpayers now have until November 1, 2024, to file various federal individual and business tax returns, make payments, and make 2023 contributions to IRAs and HSAs.
HSA Studies & Analysis
Inspira Financial Report Finds Over $1 Million Can Be Saved With a Health Savings Account
A new report by Inspira Financial finds individuals can save more than $1 million in their HSA over one's career, and families can save twice as much. Developed in collaboration with Employee Benefit Research Institute, the report examines how effective HSAs can be in helping employees save for their medical expenses in retirement independent of Medicare and employer retirement programs.
HSA Veteran Sees Plenty of Room to Grow
Steve Neeleman, founder and Vice Chair of HealthEquity, recently told securities analysts that there's "a lot of room to grow." He said that HealthEquity now provides HSAs for fewer than 35% of the people covered by its health plan partners. Plan participants' HSA adoption rates tend to rise over time as the participants learn more about HSA tax benefits, he said.
HSA Compliance Corner
Must I Establish a Trust to Open a Health Savings Account?
You cannot open a Health Savings Account with just any financial institution and cannot designate just any checking or savings account as your HSA. You must open an HSA with a financial institution approved to administer HSAs. If your preferred financial institution doesn’t offer HSAs, you must choose another institution to set up your account.
Industry News
Devenir Launches HSA Research Hub
Devenir has launched its new HSA Research Hub. This new resource offers the latest insights and trends in the Health Savings Account industry. Explore in-depth reports, data analysis, and expert perspectives to stay informed and make data-driven decisions.
Market Trends
Plan Sponsors Increasingly Offer Financial Adviser Services
More plan sponsors are pointing participants to financial advisers, according to a new survey. At the moment, 64% of plan sponsors offer advisory services to participants, and another 17% are considering an option. The financial planning connection is being driven in part by participants, with a separate survey showing that 70% say they would use an advisory service if offered.
Medicare Fears Grip America: Nearly 3 in 4 Adults Under 65 Worry the Federal Health Insurance Won’t Be Around for Them
According to a new survey, the vast majority of people under 65 (73%) fear Medicare will not be around to support them when needed. It’s a jump from 67% in 2022. The survey underscores the growing fear many have of being unable to afford the health care costs of a longer life. And some experts predict that there won’t be enough programs in place to support them.
HSAs & Retirement
Analysis Shows US Couples Aged 65-plus Need $350,000 in Savings to Cover Health Care Expenses in Retirement — Here's Why It's so Expensive
Health care is often one of the biggest expenses Americans face in retirement. It's a sad reality that health tends to decline with age, and unfortunately Medicare doesn't fully cover all care costs. Affording these medical expenses can be a major challenge, so it's important to plan carefully to ensure health-care needs don't lead to financial disaster in retirement.
The Absolute Best Strategy for Managing Your HSA, and How It Can Help Save You a Boatload of Money in Retirement
An HSA isn't a retirement account per se. Although you can take an HSA withdrawal at any time to cover a qualified medical expense, the best strategy for managing your HSA is actually to leave that money alone until retirement. That way, you can more easily cover your healthcare bills at a time when they might otherwise constitute a huge chunk of your income.
Can HSAs Help Bridge Coverage Gap for Early Retirees? Yes, but . . .
Many Americans nearing retirement find they forgot to consider the cost of medical coverage. Medical insurance is a financial necessity, but there is no early enrollment option for Medicare. Although you can't (in most cases) pay non-group premiums tax-free from your HSA, you can employ some strategies to reduce your net premium cost by strategic use of your HSA balances.
Maximizing Your HSA
Understanding HSA Tax Benefits, and if Contributions Are Deductible
HSAs are known as some of the most tax-advantaged savings vehicles designed to help you sock away money for future medical expenses. One of its main benefits is tax-deductible contributions. But it’s important to know how HSA these tax breaks work in order to avoid consequences such as tax penalties. Here are some highlights of HSAs.
When to Max Out Your HSA, and When to Skip It
Maxing out your HSA can provide a cushion to support you when a large unexpected medical bill hits. But focusing on maxing out your HSA may not always be the right decision, especially if other financial obligations like high-interest debt are weighing you down. In some cases, it’s appropriate to contribute what your budget would allow.
How an HSA Can Help You Save on Health Care Expenses
If you’re enrolled in a high-deductible health plan, consider opening an HSA. This account allows you to save money explicitly for medical expenses and the tax savings are triple. The money you invest into the account isn’t taxed, interest and investment earnings are tax-free, and you won’t pay taxes on eligible purchases.