HSAs Become More Flexible

December 26, 2019December 26, 2019ebsobenefits

hsa Currently, patients with high deductible health plans and health savings accounts have to pay for treatment of chronic illnesses out-of-pocket until they have reached their required deductible. According to IRS Notice 2019-45, those with chronic conditions such as diabetes, high blood pressure or asthma, will reduce their financial burden prior to reaching their health plan deductible.

The notice, which becomes effective on January 1, 2020, states that the service or item needed must be low cost and supported by medical evidence showing that it will prevent the chronic condition from getting worse or causing other related health issues.

HSAs Help More Face Retirement

September 19, 2019September 19, 2019ebsobenefits

According to Fidelity Investments, a couple retiring this year can expect to spend $285,000 on medical expenses during their retirement. And while the rate of healthcare cost increases has slowed in recent years, Americans are living longer, meaning they will need to address the cost of healthcare for a longer period of time.

The good news is that as we have noted many times, HSAs are becoming more popular all the time and a great way to save for retirement on a tax-free basis. Fidelity reports that their portfolio of HSA owners has grown to more than 830,000 individuals who currently own $3 billion in assets. In addition, consultants say that employers contributed nearly $9 billion to employees’ HSAs in 2018 alone. If our economy remains strong, we can expect these trends to continue. More and more employers will be able to provide matching contributions and funds contributed to HSAs are never taxed.

IRS Increases HSA Limits

September 12, 2019September 12, 2019ebsobenefits

Employees will be able to save some additional healthcare dollars in 2020 as the IRS will increase the limit on deductible contributions to an HSA by $50 for individuals and $100 for families. The limits will be $3,550 for individuals with self-only coverage and $7,100 for family coverage. The minimum deductible for a qualifying high deductible health plan will also increase, rising to $1,400 for single coverage and $2,800 for family coverage

Research shows that the number of HSAs increased by 13% over the past year, topping 25 million accounts with an anticipated increase to 30 million by 2020. Another important statistic revealed that the average employer contribution to HSAs rose from just over $600 in 2017 to $839 in 2018 – an increase of some 39%. Supporters are encouraging legislators to make HSAs even more consumer friendly by allowing adults over 65 to continue using an HSA to save for healthcare costs in retirement. We will continue to report on these efforts going forward.

HSAs Keep Growing

August 22, 2019August 22, 2019ebsobenefits

HSA While EBRI researchers have reported slower growth rates in recent years, more than 40% of HSA enrollees opened their accounts in just the past two years. Other recent projections, in fact, expect the value of HSA accounts to grow from $54 billion in 2018 to nearly $75 billion in 2020. Proposals floating around Washington could expand the list of HSA-eligible expenses as well as the age at which seniors must stop contributing to their HSA. Proposals like these would make HSAs even more valuable in the future.

HSA, FSA Limits Rise in 2019

March 28, 2019March 28, 2019ebsobenefits

Each year, the IRS announces inflation-adjusted limits for HSA and FSA contributions as well as minimum deductibles and out-of-pocket levels for High Deductible Health Plans (HDHP). Based on their recent announcement, maximum contribution levels going into effect on January 1, 2019 are as follows:

HSA, FSA Limits

Traditional Plans Decrease

November 29, 2018November 29, 2018ebsobenefits

stethescope for healthcare Since 2007, adults ages 18 to 64 with employment-based coverage have increasingly chosen High Deductible Health Plans (HDHP), both with and without Health Savings Accounts (HSA), over traditional plans.

In 2017, the number enrolled in HDHPs without an HSA rose to 24.5%, while HDHPs with HSAs rose to 8.9%. Some employers are choosing to only offer HDHPs, helping shift employees away from traditional plans.

Don’t Sell Your Clients Short: Make Sure They Use Their HSA

August 20, 2018August 20, 2018ebsobenefits

It’s undeniable: the cost of healthcare is rising and as a result it’s getting harder for your clients to pay for the care their employees need. Traditional health insurance policies aren’t right for everyone, and strong alternatives have emerged. Consumer Driven Health Plans can put the power back in the hands of members. Health Savings Accounts (HSAs) create a financial incentive to spend dollars wisely, because unspent dollars accumulate tax-free in their own personal accounts. This encourages consumers to shop around, compare prices and providers, and select the medical services that are most important for them.

Let’s take a closer look at HSAs:

What Are HSAs?
A HSA is a tax-free account in which funds can be deposited by individuals, employers or both to pay for out-of-pocket health care expenses (including medical, vision or dental expenses under Section 213(d) of the Internal Revenue Code), that may not be reimbursable by their individual or employer-sponsored health plan.

How Do I Know If My Client Is Eligible to Offer HSAs?

If your client currently has a high deductible plan that includes HSA in the name, they’re eligible! If your client’s plan name doesn’t include HSA, encourage them to consult with their insurer. The IRS has outlined that high deductible plans that offer a minimum annual deductible of $1,350 for individuals or $2,700 for families, as well as a maximum annual deductible of $6,650 for individuals and $13,300 for families, are eligible for HSAs.

Learn more about eligibility, see IRS Publication 969.

How Much Can Individuals Save in a HSA Annually?

As of 2018, members with individual coverage can save a maximum of $3,450 annually, while those with family coverage can save up to $6,900. For clients 55 or older by the end of the year, an additional $1,000 can be saved. This amount can be deposited as a lump sum or deposited over time.

For more details, including rules for married people, refer to IRS Publication 969.

HSAs are underutilized, but carry great benefits for individuals. If your clients aren’t utilizing a HSA because you haven’t recommended it as an option, you’re selling them short. Staying up-to-date on HSA qualifications and providing your clients with these and other cost saving techniques will set you apart from your competitors.

Self-Service Benefits Education

February 1, 2018February 1, 2018ebsobenefits

siri While it may not yet be widespread, some companies are looking for ways to use voice-activated assistants such as Siri and Emma to provide plan members with answers about annual contribution limits, account balances and other details regarding flexible spending accounts, HSAs, HRAs and more. Many hope that linking these intelligent assistants to a mobile app will make it easier than ever for members to get answers to questions when they need them.

Doing What We Can

January 4, 2018January 4, 2018ebsobenefits

ebso-doing-what-we-can-blog We often hear of professional athletes succeeding under pressure by staying “in the moment” and remaining focused on the things that are within their control. This challenge can be applied to the uncomfortable position all of us find ourselves in today – somewhere between complying with existing laws and anticipating the unknowns coming from Washington.

While the IRS has relaxed enforcement of the individual mandate and acknowledged problems in the ACA reporting system, it has confirmed that an applicable large employer is still subject to an employer shared responsibility payment if it fails to offer coverage to 95% of its full-time employees. We continue to help large employers offer minimum essential coverage to avoid penalties, when appropriate, and track offers of coverage to comply with reporting requirements on IRS forms 1094 and 1095.

Other matters remain up in the air as well, including the so-called Cadillac tax on high-cost health plans and any changes in maximum contributions that may be made to HSAs, which would require legislative action. While any significant ACA repeal, replace or repair efforts appear to be overshadowed by the Administration’s interest in tax reform, we continue to monitor developments in healthcare reform and keep our clients and partners informed. It’s our way of doing what we can and remaining “in the moment.”

Rapid Growth for HSAs

October 12, 2017October 12, 2017ebsobenefits

hsa-piggy-bank Health savings accounts are hot, with nearly two-thirds of respondents to a Plan Sponsor Council of America survey saying they believe that even those without a high deductible health plan should qualify. A benefit often cited by employers and employees alike is that HSAs can be a valuable part of one’s retirement strategy, since healthcare expenses are viewed as one of the largest people face in retirement.

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