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A summary of the articles included in the December 2024 edition:
- Answering Common Questions About HSAs and Medicare Enrollment
- HealthEquity Announces Retirement of CEO Jon Kessler; Scott Cutler Appointed Successor
- Can Levers Available to Retirement Plans Sponsors Help Build HSA Balances?
- HSAs Show Growth and a Focus on Education
- Reforming HSAs To Expand Gig Workers’ Access To Affordable Health Care
- Investing Gains Clout With Health Savings Account Holders
Answering Common Questions About HSAs and Medicare Enrollment
Americans age 55 and over hold an estimated $52 billion in their health savings accounts (HSAs), according to HSA investment company Devenir’s most recent research. It’s no surprise that as clients approach Medicare enrollment, they are increasingly interested in continuing to fund their HSAs to provide for current and future health care expenses.
Unfortunately, the guidance on how HSA contribution rules intersect with Medicare enrollment is limited, with many clients receiving conflicting answers from their HSA providers, Medicare and Social Security representatives, and even their own tax professionals.
HealthEquity Announces Retirement of CEO Jon Kessler; Scott Cutler Appointed Successor
HealthEquity announced that after leading the company for more than 15 years, Jon Kessler, President and Chief Executive Officer, has decided to retire effective January 6, 2025. Mr. Kessler will remain a director and act a special advisor to the Company through April 30, 2025. To succeed Mr. Kessler, the Company announced the appointment of Scott Cutler, who will join HealthEquity as President and CEO and as a director effective January 6, 2025.
Can Levers Available to Retirement Plans Sponsors Help Build HSA Balances?
Health Savings Account balances are low. What can – and can’t – employers do to help employees build their balances?
Employers who offer a Health Savings Account want their employees to be satisfied with their benefits options and ultimate choice. Satisfaction increases when employees – faced with medical-plan deductibles before their coverage begins to reimburse non-preventive care – have savings to cover these out-of-pocket expenses.
Thus, the important question that every employer should ask: What steps can I take to help employees maximize their Health Savings Account balances so that they have funds available to pay their providers? It’s not an easy question. Even the best-laid plans may bump up against employees’ general benefits indifference, ignorance, or inertia. But it’s important for companies who care about their employees to consider carefully how the design of the Health Savings Account offering can overcome these barriers.
HSAs Show Growth and a Focus on Education
Health savings accounts (HSAs) show growth by many metrics, says the Plan Sponsor Council of America (PSCA). And it comes as no surprise that they also report that efforts to educate employees about them have taken on added importance.
The PSCA’s 2024 HSA Survey shows slight growth in HSA balances and employee contributions last year, despite increased concerns about employees being able to fund their accounts. This was the PSCA’s sixth annual HSA survey and it was conducted in summer 2024 and reflects responses from more than 500 employers that provide an HSA program for employees.
For the first time, employee education and engagement were the top-cited services that employers are looking for from a vendor, and more employers are providing education more frequently.
We found that the ability for employees to be able to fund their health savings accounts is a concern cited by double the number of employers as two years ago. We also have found that employers are seeking more support in educating employees about the benefits of savings in an HSA to address these concerns.
Reforming HSAs To Expand Gig Workers’ Access To Affordable Health Care
Approximately 59 million Americans currently participate in the gig economy. For most, this is a part-time way to make money, but 17 million people derive all of their income from a variety of contracted opportunities. Gig workers are found in various industries, including transportation (for example, Uber, DoorDash, and InstaCart), freelancing (for example, Upwork), e-commerce (eBay and Etsy), and more traditional contract work such as architects, project managers, construction workers, and lawyers. There are more gig workers in construction (carpenters, electricians, plumbers, installers) than in any other industry. The trend toward gig work is growing as more Americans seek the flexibility and rewards that come with it. An expected 86 million people will be in the gig workforce by 2027.
The booming gig economy has important positive implications for the labor force and for society generally. But gig workers are not employees, and they face significant challenges in accessing affordable health care. Those who hire gig workers also face difficulties in attracting and retaining reliable workers to fill important roles. To ensure the health and well-being of gig workers and the growth and prosperity of the gig economy, Congress should consider legislative actions to address these challenges. In this Forefront article, we describe these challenges, propose solutions, and provide several policy recommendations for federal lawmakers.
Investing Gains Clout With Health Savings Account Holders
Health savings accounts, or HSAs, have been infected with the investing bug. And that’s a healthy development for Americans who will need to pay for rising health care costs in the future.
Indeed, more Americans with a health savings account now view these triple-tax-advantaged accounts designed to pay for medical expenses as the health care equivalent of the 401(k) plan.
Sure, most people with high-deductible health plans (HDHPs) still use the money they contribute to HSAs to pay out-of-pocket medical expenses and doctor co-pays during the year. But an emerging trend is gaining traction: More HSA account holders are investing part of their HSA deposits for the long term.
More HSA dollars are being invested in assets with growth potential, such as diversified stock mutual funds. At the end of June, there were 38 million HSA accounts with assets totaling $137 billion, up 18% year over year, according to Devenir Research’s midyear survey. And $56.2 billion, or 41% of those dollars, were invested. Ten years ago, just 14% of HSA assets were invested.
Still, just 9% of HSA accounts had at least a portion of their HSA dollars invested, a low total that HSA experts say amounts to a missed opportunity for account holders.