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A summary of the articles included in the June 2022 edition:
- Amid Inflation, IRS Boosts Health Savings Account Contribution Limits in 2023 for Individuals, Family Plans
- Fidelity Releases 2022 Retiree Health Care Cost Estimate: 65-Year-Old Couple Retiring Today Will Need an Average of $315,000 for Medical Expenses
- Study: Pre-Deductible HSA Coverage of Chronic Condition Meds Won’t Jack Up Premiums
- Do You Realize the Power of HSAs? Probably Not!
- You Can’t Put Money in a Health Savings Account Once You’re on Medicare. A House Bill to Change That Comes With Tradeoffs
Amid Inflation, IRS Boosts Health Savings Account Contribution Limits in 2023 for Individuals, Family Plans
If you’re eligible for health savings account contributions, you can deposit more money starting in 2023, thanks to an inflation adjustment from the IRS.
In 2023, you can save up to $3,850 with an individual health insurance plan, up from $3,650 in 2022, the IRS announced Friday. And you can soon contribute up to $7,750 with a family plan, boosted from $7,300.
To qualify, you’ll need eligible high-deductible health insurance, with an annual deductible of at least $1,500 for self-only coverage or $3,000 for family plans.
Fidelity Releases 2022 Retiree Health Care Cost Estimate: 65-Year-Old Couple Retiring Today Will Need an Average of $315,000 for Medical Expenses
Fidelity Investments announced its 21st annual Retiree Health Care Cost Estimate, revealing that a 65-year-old couple retiring this year can expect to spend an average of $315,000 in health care and medical expenses throughout retirement. The 2022 estimate for single retirees is $150,000 for men and $165,000 for women. Fidelity’s estimate assumes both members of the couple are enrolled in traditional Medicare, which between Medicare Part A and Part B covers expenses such as hospital stays, doctor visits and services, physical therapy, lab tests and more, and in Medicare Part D, which covers prescription drugs.
Once respondents of the research were informed of Fidelity’s estimate, a staggering 70% of respondents say they feel unprepared to cover health care expenses during retirement. However, there is still good news: the number of people who feel prepared increases when the person has an HSA. In fact, nearly half (47%) of HSA holders feel prepared for their health care retirement expenses, compared to just 27% of people who do not have an HSA.
Study: Pre-Deductible HSA Coverage of Chronic Condition Meds Won’t Jack Up Premiums
A 2019 IRS notice expanded the list of medications and health services Health Savings Account-eligible health plans may cover prior to meeting a patient’s deductible. Employers that take advantage of the expansion could cover these treatments with little to no increases in patient premiums, according to an Employee Benefits Research Institute (EBRI) report published May 19.
EBRI found that extending pre-deductible coverage to the list of 14 treatments for chronic conditions — including items such as statins for patients with heart disease and glucometers for those with diabetes — resulted in estimated premium increases ranging from 0% to 1.5%. The small increases could be because relatively few health plan enrollees had any of the conditions mentioned in the IRS notice, resulting in low costs to cover the treatments when spread across an entire patient population.
Do You Realize the Power of HSAs? Probably Not!
HSAs have grown in popularity since the COVID-19 pandemic caused millions of Americans to worry about getting sick. A recent industry report from Devenir reveals that the number of new HSA accounts increased by 8% last year, and this trend is only expected to continue. By the end of 2024, there will likely be more than 38 million HSAs, with assets topping $150 billion. It’s easy to understand why HSAs have increased in demand throughout the pandemic, since they are a great solution to help cover unexpected medical costs — like an unplanned hospital stay.
But HSAs are more powerful than most people realize. Health savings accounts have tax-zapping superpowers. Check out these top 10 tips to help maximize the benefits.
You Can’t Put Money in a Health Savings Account Once You’re on Medicare. A House Bill to Change That Comes With Tradeoffs
Under a bill pending in Congress, Medicare beneficiaries would be allowed to set aside money in health savings accounts — something they currently can’t do.
However, it also would change a couple of the benefits that come with HSAs for anyone who’s 65 or older.
Called the Health Savings for Seniors Act and recently introduced in the House, the bipartisan bill (H.R. 7435) revives past legislative efforts to let individuals on Medicare contribute to HSAs. With many workers using these accounts in conjunction with their employer health plan, more people are likely to reach age 65 — the point at which you become eligible for Medicare — with an HSA in tow.