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A summary of the articles included in the February 2023 edition:
- 7 Insights From 20 Years of HSAs
- House Legislation Would Expand HSAs
- What are ICHRAs? Do They Fit in the Health Savings Account World?
- HSA Search: 2023 State of Health Savings Accounts
- Mercer Projects 2024 HSA, HDHP and Excepted-Benefit HRA Figures
- Deductibles, Copayments, OOP Max Trends Indicate Cost-Sharing Growth
7 Insights From 20 Years of HSAs
In the runup to the creation of HSAs, consumer-directed benefits had just started making inroads in American health care. Many consumers and employers were looking forward to HSAs, the latest output from this growing trend. The accounts were anticipated to slow rising health care costs and encourage individuals to be more engaged with their health care choices.
It was in this environment that I founded HealthEquity, which opened its doors 20 years ago in 2002. In the years since, HSAs have become a prominent fixture in the nation’s health care system. According to the latest figures from Devenir Research, Americans now hold more than $100 billion in nearly 34 million accounts. Those savings benefit from the HSA’s unique triple tax advantage: funds are tax-free going into the account, grow tax-free in the HSA, and are not subject to taxation when spent on qualified medical expenses.
House Legislation Would Expand HSAs
Legislation that would significantly broaden the ability of individuals to use health savings accounts (HSAs) has been introduced in the House of Representatives.
Rep. Andy Biggs (R-AZ) on Jan. 9 introduced the Freedom for Families Act (H.R. 107), which would increase the annual contribution limits to $9,000 for single coverage and $18,000 for family coverage.
Perhaps most significantly, the legislation would do away with the requirement that an individual must be covered under a high deductible health plan (HDHP) in order to contribute to an HSA, opening up the ability for a much broader pool of individuals to use the accounts to save for future health costs.
What are ICHRAs? Do They Fit in the Health Savings Account World?
ICHRAs are gaining some traction in the market. Do they conflict with Health Savings Accounts? It depends.
Individual-Coverage Health Reimbursement Arrangements were created by the Trump Administration by executive order in 2019 and became available to employers effective Jan. 1, 2020. They’re a way for companies to offload their responsibility for offering employer-sponsored medical coverage and instead provide funds to eligible workers, who then shop for the coverage that best meets their needs.
The Administration projected that when ICHRAs were mature, they’d enroll about 11 million Americans, including 800,000 who previously lacked coverage. The rest would be employees whose company switched from group coverage and people who already bought plans in the nongroup market but now would receive an employer subsidy to offset some of the premium cost.
HSA Search: 2023 State of Health Savings Accounts
HSAs continue to be an important tool for health care consumers as they look to both pay for today’s healthcare expenses and save for tomorrows. We wanted to provide a fresh snapshot of some of the key HSA Search characteristics to consider when evaluating a health savings account provider.
In this blog post HSA Search takes a look at industry wide averages for minimum opening balances, monthly maintenance fees and investments.
Mercer Projects 2024 HSA, HDHP and Excepted-Benefit HRA Figures
Mercer projects the 2024 inflation-adjusted amounts for health savings accounts (HSAs), high-deductible health plans (HDHPs) and excepted-benefit health reimbursement arrangements (HRAs) will rise significantly from 2023 levels. These unofficial 2024 amounts are determined using the Internal Revenue Code (IRC)’s cost-of-living adjustment methods, the actual Chained Consumer Price Index for all Urban Consumers (C-CPI-U) values through December 2022, and Mercer’s projected C-CPI-U values for January through March 2023. The HSA catch-up contribution limit is set by statute and hasn’t changed since 2009.
Deductibles, Copayments, OOP Max Trends Indicate Cost-Sharing Growth
From 2013 to 2020, cost-sharing trends shifted: deductibles grew, copayments increased for certain services and depending on union employment, and out-of-pocket healthcare spending maximums rose, according to a study from Employee Benefit Research Institute (EBRI).
The EBRI Center for Research on Health Benefits Innovation (CRHBI) conducted this study using data from the Merative Market Scan Commercial Claims Database and Benefit Plan Design. The study analyzes the data for 5.6 to 8.4 million policyholders from 2013 to 2020.
“The biggest change in plan enrollment was the movement of enrollees from preferred provider organization (PPO)/point-of-service (POS) and comprehensive health plans to health maintenance organization (HMO)/exclusive provider organization (EPO) and health savings account (HSA) eligible health plans,” the study highlighted.