HSA News for August 12, 2024
HSA news is compiled weekly by Mr. HSA, Roy Ramthun.
News from Washington
Are District Court Rulings the ‘Final End’ For DOL’s Fiduciary Rule?
Experts say the likelihood of the Labor Department's Retirement Security Rule surviving recent federal district court losses is dim. “The standard for a stay is relevantly significant here, and at this point, it seems like the courts are very dubious, to say the least, [of the rule],” said David Levine, an ERISA defense attorney with the Groom Law Group.
DOL Reviewing Options with Fiduciary Rule
With two recent court decisions putting a halt to the Department of Labor’s final investment advice fiduciary rule, the Department is currently holding internal discussions to determine next steps, a senior official said on July 30. DOL is considering decisions that need to be made from a compliance standpoint to ensure that participants know that they are getting advice that is in their best interest.
Compliance Corner
Changes to Medicare Part D Drug Benefit Will Be Felt by HSA Owners
The Medicare Part D prescription drug program will undergo a fundamental change effective January 1, 2025. This change will mean fewer working seniors with HSA-qualified coverage through their employer will meet Medicare's "creditable coverage" standard. They will need to determine whether delaying enrollment in Medicare makes sense.
Industry News
Saturna Capital Expands Employer HSA Offerings
Saturna Capital Corporation announced it has revamped its employer HSA offering to help employees overcome one of the most common hurdles to maximizing the benefit: moving contributions to the investment account. Saturna’s HSA now offers an option to automate transfers into the investment account and allows companies to mimic the funds used in the organization’s 401(k) plan.
Market Trends
401(k), HSA Account Balances Grow in Q2: Bank of America
401(k) and HSA participants closed off Q2 with higher balances and steady contribution rates, finds new data from the Bank of America. The average 401(k) balance in March was up 8% compared to year-end 2023, while contributions increased 20% over the last two quarters of 2023. Average HSA balances rose to $4,930 in Q2, compared to $4,380 at year-end 2023, and 37% said they contributed more than they withdrew year-to-date.
Inside Employers' Concerns About High Healthcare Costs
According to a recent survey by Gallagher, 80% of respondents said they offer more than one health plan. Currently, the fastest growing type of health plan is a CDHP with an HSA. 56% of respondents said they offer lower-cost CDHPs with HSAs, and 24% said they have more employees enrolled in CDHP plans with HSAs than any other plan.
HSAs & Retirement
Where Do I Invest After I've Maxed Out My IRA? 3 Ways to Grow Your Money and Boost Your Retirement Savings
An HSA is a great place to save for retirement, even though these accounts are meant to be used for medical expenses. If used strategically, it can benefit those saving for their retirement years. The major benefit of an HSA is that they’re triple tax-advantaged — contributions are tax-deductible, the money grows tax-free, and withdrawals for qualified medical expenses are tax-free.
Costs Soar for Health Care in Retirement, per Fidelity Report
In its 23rd annual report, Fidelity Investments revealed that a 65-year-old retiring this year can expect to spend an average of $165,000 in health care and medical expenses throughout retirement. The report assumes an individual is enrolled in Medicare but notes that Medicare premiums, dental and vision care, and all other costs that Medicare does not typically cover are left to retirees to manage on their own.
How Expensive Can Your Healthcare Get After Retirement?
New research by RBC Wealth Management says an average 65-year-old couple who retired in 2022 can expect to spend over $680,000 in future healthcare costs. RBC says Medicare will cover less than two-thirds of your healthcare expenses in retirement. The authors say assume you'd spend about 15% of your budget on health if you retire today.
Maximizing Your HSA
Is Medical Travel a Qualified Expense?
You can reimburse certain travel expenses tax-free from your HSA if the primary purpose of the trip is to receive medical care. These expenses include transportation costs, tolls and parking fees, and lodging up to certain limits. You can’t reimburse for anyone other than the patient and a single caregiver, or any other incidental expenses.
Consumer-Driven Health Care
Experts Debate: Are HDHPs Still a Valid Cost-Saving Option?
We asked two professors and authors with opposing political viewpoints to share their opinions about whether HDHPs provide a valuable money-saving option for employees and employers. Here is a summary of the debate that ensued between the two professors.