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A summary of the articles included in the November 2023 edition:
- KFF 2023 Employer Health Benefits Survey: High-Deductible Health Plans with Savings Option
- How to Take Advantage of a Health Savings Account
- HSAs at 20 Years: Have They Made a Difference?
- HSA Deposit Rate Update – September 2023
- 2023 Health Savings Account Landscape
- Working Consumers Oblivious to HSA Benefits
KFF 2023 Employer Health Benefits Survey: High-Deductible Health Plans with Savings Option
The Kaiser Family Foundation (KFF) released its 25th annual survey of employers, providing a detailed look at trends in employer-sponsored health coverage, including premiums, employee contributions, cost-sharing provisions, offer rates, wellness programs, and employer practices.
Section 8 of the report takes a deep dive into high-deducible health plans and associated savings accounts. The report found 30% of firms offering health benefits offer an HDHP/HRA, an HSA-qualified HDHP, or both. Among firms offering health benefits, 8% offer an HDHP/HRA and 24% offer an HSA-qualified HDHP. The percentage of firms offering an HDHP/SO is similar to last year.
How to Take Advantage of a Health Savings Account
Health insurance plans with high deductibles may, at first glance, seem unappealing because you’re likely to pay more out of pocket now for medical care. But such plans can also offer the option of investing for the future through special health savings accounts. Health savings accounts offer valuable tax benefits and have become increasingly popular since they were introduced two decades ago.
HSAs at 20 Years: Have They Made a Difference?
Have Health Savings Accounts helped ordinary Americans afford the ever-rising cost of medical care?
This past Oct. 15 was HSA Day. Whether you celebrate HSA Day or not won’t affect your general health or financial situation. But HSA Day, placed midway between the annual due dates of federal income taxes and at the beginning of open enrollment for tens of millions of American workers, is important. Its purpose is to shine a spotlight on the financial advantages that Health Savings Accounts offer hard-working American families. Many account administrators develop educational programs to encourage more people to open an account, nudge those who own an account to increase their contributions to build a medical emergency fund, and help those with sufficient cash balances to understand the benefits of investing a portion of their funds to retain the spending power of balances held to reimburse qualified expenses decades from now.
HSA Day is also a good time to examine the state of the Health Savings Account market and where it’s headed.
HSA Deposit Rate Update – September 2023
In our June 2023 update, we saw that HSA deposit rates ticked up from previous years in response to increases in the federal funds rate between March 2022 and May 2023. Since then, the Federal Reserve raised the federal funds rate by 25 basis points, and it currently sits in the range of 5.25% – 5.50%. Projections and comments from Fed members indicate that one more rate hike of 25 basis points could be in store for 2023, though any moves will be highly dependent on economic data.
Looking at HSA deposit rates again at the end of Q3 2023, we see that this upward trend has continued.
2023 Health Savings Account Landscape
Morningstar published its 7th annual landscape study on health savings accounts (HSAs) available to individuals. The study evaluated 10 of the top HSA providers on two different use cases: as investment accounts to save for future medical expenses and as spending accounts to cover current medical costs.
Overall, the study found HSA features have improved in the past year with several plans cutting fees and offering higher quality investment menus. However, the industry is still maturing and falls short on several issues like transparency, ease of use, and costs.
Working Consumers Oblivious to HSA Benefits
While working adults may know what a health savings account (HSA) is, new findings show they might not completely understand them.
A new thought leadership paper from Voya reports that a prominent number of consumers are not fully optimizing usage of their HSAs. According to the report, “Amplifying the power of HSAs to boost health care savings—now and in retirement,” just 27% of respondents grasp that HSAs can be used as investment vehicles, and only 35% understand the primary reason for HSAs: to invest money for healthcare expenses throughout retirement.
Furthermore, 55% of working adults were aware that HSAs can be used to pay for healthcare expenses in retirement, and 54% know about the tool’s tax advantages.