HSA News for July 22, 2024
HSA news is compiled weekly by Mr. HSA, Roy Ramthun.
HSA Studies & Analysis
HSA-Like Options for Employees in High Demand, Survey Shows
Both employers and employees are interested in a new type of health account similar to an HSA that would help employees pay for out-of-pocket health care costs, according to a new survey. The hypothetical plan could be paired with any health plan, not just HDHPs, funded by both employees and employers, invested in the stock market, and portable.
HSA Deposit Rate Update – June 2024
HSA interest rates continue their upward trajectory, with increases across all balance tiers. As of June 30, the average rate for $1,000 balances reached 0.44%, up from 0.42% in December 2023. More substantial gains are seen in higher balances, with $10,000 accounts now averaging 0.55% and $50,000 balances hitting 0.62%.
Compliance Corner
Divorce Prompts Some Changes in the Way That You Use Your Health Savings Account
Anyone who's gone through a divorce understands that the process of untangling the financial aspects of the broken relationship are difficult. That complexity extends to HSAs. Fortunately, the rules are clear. The problem: Not all divorce lawyers understand HSAs as well as they could. So if you're party to a divorce, familiarize yourself with the HSA rules.
Some, but Not All, Mistaken Contributions Can Corrected without Taxes and Penalties
Because of a mistake between my company and its payroll provider, more money was deducted from my paycheck for an HSA contribution than I wanted. Can this error be corrected and the funds returned to me? Yes. IRS guidance from 2008 lists the few circumstances in which contribution errors can be corrected.
Industry News
InComm Payments Offers a "New Way to HSA" with Launch of InComm Benefits
InComm Payments announced the launch of InComm Benefits, a new division providing automated and intuitive HSA and FSA services. InComm Benefits' solutions streamline tasks such as receipt tracking and record keeping for employees, whether they use an account for spending or investing. The platform's analytics automate IRS rules and account management, which help users maximize tax savings.
Market Trends
Healthcare Costs Set to Rise by as Much as 8% in 2025: PwC
Healthcare costs are set to rise 8% in the group market and 7.5% in the individual market in 2025, according to a new report from PwC's Health Research Insitute. That spending growth is likely to reach a 13-year high, according to the analysis. Factors behind the increases in spending include ongoing inflationary pressures, prescription drug spend and increases in utilization for behavioral health, according to the report.
Best Practices
The Unexpected Perks of an HSA: 3 Things Employees Should Know
The lack of knowledge about how HSAs work and what they can be used for remains high for employees and is the driving factor behind lack of enrollment and utilization. HR professionals can help employees make the most of their HSA by educating them about the unexpected perks of HSAs. Here are three simple things HR teams can do throughout the year to improve HSA utilization and satisfaction.
How Employers Can Support Retirement-Age Employees
Employers can support retirement-age employees by strengthening core benefits like fully-paid health, dental and vision plans, along with HSAs. HSAs are retirement-friendly by nature as employees can use these accounts to cover premiums and medical expenses in retirement, even when they're on Medicare. It's essential to remind them of their specific value and help employees understand how to maximize these benefits as they age.
HSAs & Retirement
Saving for Retirement Shouldn't Be on Employees Alone: 3 Ways Employers Can Help
A majority of employers feel a responsibility to support the financial wellness of their employees, but many employers forgo offering retirement plans altogether because they can be cost-intensive and resource heavy. Here are three ways that employers can help employees to navigate the retirement savings crisis and support their future.
Here's What You Need to Know About Medicare If You're Saving in an HSA for Retirement
Many people opt to treat HSAs as retirement plans because funds in these accounts don't need to be used up by a specific deadline. However, many retirees inevitably end up enrolling in Medicare and the rules can be a bit complicated, so make sure to understand them well ahead of retirement. Here are some key points to keep in mind.
Gen Zers Most Confident About Retirement, but Still Worry About Outliving Savings
For the third year of a survey by BlackRock, more than 60% of all respondents expressed fear of outliving their savings. Gen Z employees expressed the highest level of retirement confidence, with 77% saying they feel on track to retire with the lifestyle they want. However, 69% of this cohort said they worry about outliving their retirement savings.
Maximizing Your HSA
Why HSAs Look Great (And Will Look Even Better in 2025)
Next year, anyone already setting aside money in an HSA will be able to contribute a little more than they could in 2024. That's great news for anyone who already planned on contributing to one of these accounts as a way of optimizing their health care spending.
But it should also serve as a nudge for people who aren't as aware of HSAs' benefits to take a closer gander at this tax-smart tool.