HSA News for August 19, 2024
HSA news is compiled by Mr. HSA, Roy Ramthun.
Compliance Corner
These Common HSA Mistakes Can Cost Clients
Clients eager to use the benefits of HSAs must steer clear of all-too-common mistakes that could bring large tax payments or big penalties, according to experts. Potential mishaps include distributing money toward costs that don't fit the IRS definition of "qualified medical expenses" and planning for a tax hit if a non-spouse beneficiary inherits an account.
Direct-Primary Care, Concierge Medicine, and Eligibility to Fund an HSA
If you have an HSA and are enrolled in or considering joining a Direct-Primary Care practice, you will be disqualified from opening and funding an HSA. It's unfortunate that perhaps the best primary-care model for patients facing high deductibles for non-preventive care disqualifies patients from an HSA. However, there may be a workaround for families with one healthy HSA-eligible adult.
Is Botox a Qualified HSA Expense?
Botulinum toxins are a qualified expense when used for specific indications approved by the FDA that treat specific medical conditions. In contrast, the use of neurotoxins for cosmetic purposes – to treat frown lines, forehead lines, crow’s feet, and other evidence of aging – isn’t qualified.
Industry News
How This Founder Is Reinventing the Health Savings Account
Alex Cyriac, co-founder of Lively, found himself asking about the health insurance industry after medical complications left his mother struggling with years of chronic pain and stacks of bills. Now, the goal is to be a consumer-friendly alternative offering fewer forms and fees and no getting brushed off by unhelpful customer service reps.
Market Trends
Aon: U.S. Employer Health Care Costs Projected to Increase 9 Percent Next Year
The average cost of employer-sponsored health care coverage in the U.S. is expected to increase 9.0 percent, surpassing $16,000 per employee in 2025, according to Aon. This projected increase, which assumes employers do not implement employee cost sharing increases and other cost saving strategies, is higher than the 6.4 percent increase to health care budgets that employers experienced from 2023 to 2024.
Best Practices
Are You Using the Right Tax Breaks to Boost Investment Returns?
Unlike in the past, there is an array of tax-sheltered account options that fall into five major buckets. Making smart use of this bucket list could have a larger impact on your overall investment returns. But it’s tough. Each bucket has different tax rules, and there’s no “right” mix. It will vary with your age, risk appetite, income over time and spending needs.
To Celebrate National Financial Awareness Day, Inspira Shares One Person’s Health and Wealth Journey With an HSA
National Financial Awareness Day (August 14) provides an opportunity to look at how health and wealth solutions come together to create meaningful impact for individuals. HSAs are an ideal example of how employers can combine support for employees' health care needs with retirement support.
HSAs & Retirement
Here's What It Takes to Save $1.5 Million for Retirement
If you want to build a $1.5 million nest egg for retirement, good on you. Depending on your situation, it's an ambitious but achievable goal. To get there, you'll need to consistently invest a decent chunk of your paycheck, find the right investment strategies, and maximize tax benefits. Here's what it will take to save $1.5 million for retirement.
Healthcare Costs in Retirement Are Rising— Here's What You Can Do To Keep Up
When planning for medical expenses in retirement, experts suggest seeking professional help to fully understand the nuances among the different types of Medicare. Making the wrong decision can be costly. For those who are further away from retirement, contribute to an HSA, if you are eligible, to leverage tax savings for future medical expenses.
No 401(k) and IRA Maxed Out? You Might Be Able to Save More for Retirement Here
Retirement accounts are usually the preferred place to keep long-term savings because they offer tax advantages that help you keep more of your money. If you feel as if you're stuck waiting until 2025 because you've maxed out your IRA and don't have access to a 401(k), you might have another option. HSAs offer many of these same benefits.
Maximizing Your HSA
HSAs are Evolving: Here’s What to Know Beyond the Basics
HSAs can help manage medical costs beyond personal basics and help cover important bills for spouses, child and medical dependents. Beyond a fundamental understanding of what an HSA can do, it’s also critical to be informed of their full scope and how they need to be managed over time. Be sure to research and consider working with a professional to help you understand the full spectrum of benefits and other considerations involved.