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A summary of the articles included in the April 2024 edition:
- Devenir Report Highlights Booming HSA Asset Growth, Reaching $123 Billion
- Study Shows Gen Z Employees Not Taking Advantage of Health Savings Accounts
- HSA Expansion Bills Added to the House Legislative Calendar
- HSA Planning After 55: What Your Clients Might Not Know
- IRS Alert: Beware of Companies Misrepresenting Nutrition, Wellness and General Health Expenses as Medical Care for FSAs, HSAs, HRAs and MSAs
- Covered on Ex-Spouses Plan? You Still May Be HSA-eligible.
Devenir Report Highlights Booming HSA Asset Growth, Reaching $123 Billion
- Total HSA assets reached $123 billion, 19% increase year-over-year
- HSA dollars that are invested soared to $46 billion, up 37% year-over-year
- There are now over 37 million health savings accounts, a 5% increase year-over-year
- $50 billion was contributed to health savings accounts in 2023
Devenir, a national leader in providing investment solutions for Health Savings Accounts (HSAs), released the results of its 27th semi-annual health savings account survey and resulting research report. Devenir found that there is about $123 billion saved in over 37 million HSAs at the end of 2023.
Study Shows Gen Z Employees Not Taking Advantage of Health Savings Accounts
Many Generation Z employees with access to a health savings account are not using them to their full potential or are not contributing to them at all, according to new data from Inspira Financial.
While young professionals tend to champion mental health and investing in their physical and emotional well-being, Inspira found that nearly one-third of employees younger than 30 contribute nothing to their HSA annually (a higher figure than any other generation), and only 14% contribute more than $3,000 per year (a lower percentage than any other generation).
Inspira’s report analyzed 700,732 Inspira HSA holders from January 2023 through September 2023.
HSA Expansion Bills Added to the House Legislative Calendar
Two Health Savings Account bills are available for debate on the floor of the House of Representatives. Both would expand eligibility to more Americans.
Rarely does a session of Congress pass without some attention to Health Savings Accounts, particularly when Republicans control the House of Representatives. And the 118th Congress is no exception. Two bills that were approved by the House Ways & Means Committee (one of two committees, along with Energy & Commerce, with jurisdiction over Health Savings Accounts) were recently added to the House calendar. This move means that they’re now available to be brought to the floor for debate and voting.
HSA Planning After 55: What Your Clients Might Not Know
To say that employees who are approaching retirement have a lot on their minds is a dramatic understatement.
In the years immediately before retirement, employees who are planning smartly should be thinking about their financial security more than ever. Their concerns, however, are likely different from employees who are decades away from leaving the workforce. Health savings accounts are one type of planning vehicle that’s often overlooked during the pre-retirement planning process.
While most employees are familiar with the triple-tax benefits of the HSA option, the issues that are specific to older employees are often ignored. A full understanding can help pre-retirees feel more confident as retirement nears — and can also help them avoid expensive mistakes when it comes time to enroll in Medicare.
IRS Alert: Beware of Companies Misrepresenting Nutrition, Wellness and General Health Expenses as Medical Care for FSAs, HSAs, HRAs and MSAs
Amid concerns about people being misled, the Internal Revenue Service today reminded taxpayers and heath spending plan administrators that personal expenses for general health and wellness are not considered medical expenses under the tax law.
This means personal expenses are not deductible or reimbursable under health flexible spending arrangements, health savings accounts, health reimbursement arrangements or medical savings accounts (FSAs, HSAs, HRAs and MSAs).
This reminder is important because some companies are misrepresenting the circumstances under which food and wellness expenses can be paid or reimbursed under FSAs and other health spending plans.
“Legitimate medical expenses have an important place in the tax law that allows for reimbursements,” said IRS Commissioner Danny Werfel. “But taxpayers should be careful to follow the rules amid some aggressive marketing that suggests personal expenditures on things like food for weight loss qualify for reimbursement when they don’t qualify as medical expenses.”
Covered on Ex-Spouses Plan? You Still May Be HSA-eligible.
Question: I’m divorced. My ex-spouse covers me on his HSA-qualified medical plan as part of our divorce agreement. Can I open and fund a Health Savings Account?
Answer: Yes, if you meet all Health Savings Account eligibility requirements. Your being an ex-spouse is not relevant in determining your Health Savings Account eligibility. If you are covered on an HSA-qualified medical plan, don’t have any disqualifying coverage, and don’t qualify as another taxpayer’s tax dependent under Section 152 of the tax code, you can open and fund a Health Savings Account.