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A summary of the articles included in the May 2023 edition:
- HSA Assets Surpass $100 Billion Milestone
- New HSA Bill Could Help Working Medicare Enrollees
- Devenir Releases Viewpoints White Paper – Best Practices: HSA Investments Menu Design
- 83% of Consumers Are Interested in Health Savings Accounts for Non-HDHPs
- HSAs: 19 and Still Going Strong
- HSA Investments Fall on Poor Markets, Rising Rates
HSA Assets Surpass $100 Billion Milestone
Health savings accounts surpassed $100 billion in total assets for the first time in 2022, and accounts experienced robust asset growth early in 2023, new research from HSA consultant Devenir Group LLC shows.
Total assets in health savings accounts were buoyed by strong market returns and the influx of January contributions, reaching $112.5 billion at the end of January, up 8% since year-end 2022, the Devenir January 2023 Supplemental Survey found.
“Despite significant market headwinds, we saw more health savings accounts utilizing investments than ever before as account holders continue to recognize the long-term growth potential that HSAs offer,” stated Jon Robb, senior vice president of research and technology at Devenir, in a press release.
New HSA Bill Could Help Working Medicare Enrollees
A new bill could open the door for U.S. workers over age 65 to put cash in health savings accounts.
H.R. 2769, the Stop Penalizing Working Seniors Act bill, would cut through a legal knot that now keeps most older workers from contributing to HSAs.
Rep. Rob Latta, R-Ohio, introduced the bill last week. He has three cosponsors, all of whom are Republicans.
If Congress passes H.R. 2769 or a similar bill, it could make it easier for older, employed clients to use HSAs in retirement planning and post-retirement health cost planning.
Devenir Releases Viewpoints White Paper – Best Practices: HSA Investments Menu Design
Devenir, a market leader in HSA investments, has released a white paper Viewpoint exploring best practices for health savings account (HSA) investment menu design.
Highlights from the Viewpoint include:
- Menu Size – It may be advantageous to include more funds in an HSA menu than a 401(k) menu due to the wider range of use cases for HSAs, among other factors.
- Asset Class Selection – Menus should include a mix of asset classes that may contribute to the long-term upside potential of a portfolio without introducing excessive risk. The menu should provide the ability to create portfolios geared towards various HSA objectives.
- Product Mix – Product mix should complement selected asset classes through active and/or passive options where appropriate and provide single-fund portfolio options such as allocation and target-date funds.
83% of Consumers Are Interested in Health Savings Accounts for Non-HDHPs
Many consumers would be interested in a type of account that was like a health savings account (HSA) in its construction but able to be attached to plans other than high deductible health plans (HDHPs), a survey from Employee Benefit Research Institute (EBRI) stated.
“We decided to test enrollee interest in a new type of health account similar to an HSA. Like an HSA, the new health account could be funded by both workers and employers, could be invested in the stock market, and would be portable from job to job. Earnings would grow tax free, and contributions would be capped,” the EBRI researchers explained.
Overall, more than eight in ten consumer participants were extremely, very, or somewhat interested. Specifically, 55 percent were extremely interested or very interested. Less than a fifth of the respondents reported that they were either “not too interested” or “not at all interested” in the new type of account.
HSAs: 19 and Still Going Strong
A belated happy birthday to health savings accounts, which turned 19 in December 2022. Officially established in 2003 as part of the Medicare Prescription Drug, Improvement and Modernization Act to help individuals save on their overall health care costs, HSAs allowed people to set aside pre-tax money to pay for qualified medical expenses. As we look forward to HSAs 20th birthday, it’s important to look at how these accounts came to be, where they stand now and what they could look like in the future.
HSA Investments Fall on Poor Markets, Rising Rates
Despite several years of rapid growth, market headwinds lowered the amount of money invested via health savings accounts (HSAs) last year.
That’s according to data released last week from HSA investment provider Devenir. The amount of HSA balances used for investments dipped 2% in 2022, down to $33.8 billion and breaking a growth streak going back at least a decade. Investments represented 32% of all HSA account balances In 2022.