HSA News for July 24, 2023
News is compiled weekly by Mr. HSA, Roy Ramthun.
News from Washington
IRS Reminder to Storm Victims in 4 States: File and Pay by July 31
The Internal Revenue Service reminded individuals and businesses in parts of four states that their 2022 federal income tax returns, tax payments, and contributions to IRAs and HSAs are due on Monday, July 31, 2023. The deadline applies to taxpayers affected by four different disaster declarations for incidents occurring during late March and early April of this year.
California Republicans Want the State to End Tax on Health Savings Plans
Led by Rep. Michelle Steel, six Republican members of California’s congressional delegation sent a letter to Gov. Gavin Newsom urging him to end the state tax on Health Savings Accounts.
California and New Jersey are the only two states in the U.S. to tax these plans. Over the years, most states fell in line with exempting HSAs except for California and New Jersey.
Biden Urged to Tackle Medical Debt Beyond Credit Cards
About 20 percent of Americans have medical debt, and the Biden administration is trying to address the issue in part by targeting medical credit cards, which have been around for decades but are becoming more prolific as more providers promote them in their offices as a way to pay for care and out-of-pocket costs not covered by insurance.
HSA Compliance Corner
Qualified Expenses: Health FSA Versus Health Savings Account
Both Health Savings Accounts and Health FSAs offer tax savings on distributions, allowing owners and participants to reimburse qualified expenses with tax-free funds. But what is a qualified expense? The answer is important. Withdrawals from Health FSAs are limited to qualified expenses. What do you need to know to remain compliant with federal tax law if you own an HSA?
Industry Best Practices
3 Ways to Drive HSA Adoption
Even with the high number of businesses offering HSA plans to workers, just 40% of employees are enrolling, leaving plenty of healthcare cost savings on the table for both employers and employees. Boosting HSA enrollment could be an important way to realize your healthcare benefits goals. Here are three strategies to help you get there.
Unlocking the Power of Employee Benefits
Generation-X and Millennials make up 68% of the workforce, and they are driving benefit trends and utilization of account-based plans, including FSAs and HSAs. FSAs tend to be favored by older generations, while younger generations seem to favor HSAs. Consider your message and positioning to help employees identify the choices that make the most sense for them.
Market Trends
Changing Workforce: Employees Over 55 Will Make Up 25% of US Labor Market by 2031
By 2030, the number of jobs shifting to workers older than 55 will reach 150 million worldwide, according to a new study. Among American workers, 41% now expect to work beyond age 65, compared to 12% three decades ago, a trend that will push the percentage of U.S. workers older than 55 to 25% in 2031 from 18% in 2021, the study said.
HSAs & Retirement
Use Your HSA to Save on Taxes in Retirement
Most Americans are not receiving tax breaks on their medical expenses anymore. The good news is: even if you can't itemize your medical expenses, there still may be a chance for you to receive some relief. Even though they are most commonly used during employment, including Health Savings Accounts in your retirement planning strategy can be very beneficial.
Retirees: Health Care May Cost Less Than You Think
Is the average American really facing a future of devoting her entire retirement nest egg to health care? I’ll explain in detail but here’s the gist: if you’re high-income, you can afford the high premiums. If you’re low-income, the entire system will be free. If you’re middle-class, you’ll have a variety of options to make the expenses affordable and predictable.
What Does Medicare Part A Cover? Here’s Everything You Need to Know About Its Benefits and Costs
Medicare Part A covers hospitalizations and sometimes covers skilled facility care, home health care and hospice care. You don’t have to sign up for Part A when you turn 65, but there’s usually no reason not to do so. You’ll automatically get Part A at age 65 once you start claiming Social Security. Although most people don't pay a premium for Part A, there can be substantial out-of-pocket costs.
Maximizing Your HSA
What Is an HSA and How to Get the Most Out of Yours?
An HSA can be a great way to recognize potentially significant tax savings, if you’re eligible. Experts say it’s worth learning about HSAs because the tax advantages and flexibility create a unique savings opportunity. And unlike with an FSA, your money isn’t subject to a “use it or lose it” rule. Read on to learn if you’re eligible to open an HSA account, and how it can augment your long-term savings goals.
Understanding Tax Terms — Health Savings Accounts
A HSA is a great way to cut your spending on medical expenses. Contributions to an HSA can be made via payroll deduction or directly to the account and deducted as an adjustment on your tax return. This approach effectively reduces your medical bills by as much as 37%! Here are four ideas you can use to take full advantage of this tax-savings vehicle.
Managing Your Health Savings Account During Life Transitions
An HSA is a lifetime account. Once you open and fund it, the account remains active for the rest of your life (or until you deplete the balance). You can continue to benefit even when you lose your eligibility to deposit additional funds. Here's how you can leverage your HSA to enhance your finances during job and family transitions.
What Should You Do with Your HSA if You Get Laid Off?
If you've been laid off, take time to get your financial accounts straightened out. Let’s start with an easy one, like your Health Savings Account. You have three options: (1) leave it where it is; (2) roll it over; or (3) consolidate any multiple HSAs that you have. When you get a new job, you may want to open a new HSA. There's no limit on the number of HSAs that you can have.
Consumer-Driven Health Care
Bipartisan Bill Would Empower Consumers to Use FSAs and HSAs to Purchase Dietary Supplements
A newly proposed bipartisan congressional bill aims to allow consumers to use HSAs and FSAs to purchase dietary supplements using pre-tax dollars. Currently, most dietary supplements are not eligible purchases under HSA and FSA plans. These plans generally only cover supplements that are prescribed by physicians for specific medical purposes, such as for prenatal care.
Just More Than a Third of Hospitals Are Complying With Price Transparency Rules: Report
More than two years after federal hospital price transparency rules went into effect, only about a third of hospitals are currently in compliance, according to a new report. While most hospitals have posted files about their prices, 64 percent of them had files that were incomplete or listed prices that were not “clearly associated with both payer and plan.”