HSA News for August 26, 2024
HSA news is compiled weekly by Mr. HSA, Roy Ramthun.
Compliance Corner
Can You Reimburse Your Ex-Spouse's Qualified Expenses Tax-Free?
A family-court judge can order you to assume partial or full responsibility for an ex-spouse’s future medical expenses. But that judge cannot override federal tax law. HSA distributions for your ex-spouse’s qualified medical expenses are included in your taxable income and subject to a 20% penalty unless you have reached age 65 or are disabled.
Why Does Medicare Impose Penalties That May Ensnare HSA Owners?
A growing number of seniors remain active at work and enrolled on their employer-sponsored medical plan. This option is particularly attractive for workers who are covered on their employer's HSA-qualified plans and actively funding their HSAs. But they must defer enrollment in Medicare or lose their HSA eligibility. Here's why.
Industry News
Wintrust Expands Workplace Solutions Offering for HSAs, FSAs, and More, Powered by First Dollar
Wintrust Financial Corporation announced it has selected First Dollar to power HSAs, health FSAs, HRAs, and other employee benefit accounts. Wintrust will leverage First Dollar’s technology to enhance and elevate its consumer-directed health and lifestyle accounts portfolio for a fully integrated benefit experience.
HSA Week 2024 Offers Free Resources and Personalized Healthcare Savings Paths
HealthEquity will kick off the second annual HSA Week on August 26. The week-long event will include a variety of resources to educate workers and companies about HSAs and their potential to improve healthcare savings and financial stability.
Market Trends
Workplace Insurance Could Soon Be Stripped Down
Absent any changes to the way benefits are designed, the Business Group on Health estimates health care costs will jump nearly 8% in 2025, compared with a 7.2% increase this year. Surging demand for blockbuster GLP-1 weight-loss drugs is helping drive up the cost of workplace insurance, leading some to predict pared-down benefits next year.
Despite Confidence in Healthcare Decisions, Americans Concerned About Costs
According to HSA Bank's latest annual Health & Wealth Index, 35% of consumers continue to worry about medical costs in the next year, and 36% are unsure how to pay for healthcare costs in retirement. 30% say they would leave an employer for improved benefits like a better HSA offering or contribution match. Of those who have an HSA, 65% report regularly or occasionally investing their funds to cover future healthcare expenses.
HSAs & Retirement
5 Unexpected Ways to Reduce Your Healthcare Costs in Retirement
Healthcare costs make up a large portion of most retirees' living expenses, and many people don't have enough money set aside in their budget specifically for healthcare expenses. If you fall in this category, the best place to save for future healthcare costs is in an HSA. Far too few people take advantage of these excellent accounts.
A Third of Americans Plan to Retire on Social Security Alone, but It May Not Be Enough to Get By
According to a new report, about a third of US adults believe Social Security alone will provide enough income for them to live comfortably in retirement, but another third said they won't have a retirement account to pull from when they leave the workforce. An HSA can help people avoid draining their retirement savings if they have a health emergency.
Where High Earners Can Save After Maxing Employer Retirement Plans
Here is where you can save once you’ve maxed out your employer-sponsored retirement plan, along with some of the tax implications of each option. For example, although HSAs aren’t technically designed for retirement planning, they can be useful as a supplement to your other retirement savings as healthcare costs increase significantly in retirement.
Maximizing Your HSA
Using HSAs, Health FSAs and HRAs for Over-the-Counter Items
HSAs, health FSAs, and HRAs may provide tax-free reimbursements of certain over-the-counter items available to consumers without a prescription. To be reimbursable, an OTC item must be for “medical care,” as defined under Internal Revenue Code. In addition, menstrual care products may also be paid for using these tax-advantaged arrangements.