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A summary of the articles included in the November 2024 edition:
- Health savings accounts offer investors ‘unmatched’ tax benefits, expert says. Here’s how to take advantage
- IRS approves ’employee choice’ program, in private letter ruling: Willis Towers Watson
- An HSA-Day Look at Where Health Savings Accounts Stand Today
- KFF 2024 Employer Health Benefits Survey: Section 8: High-Deductible Health Plans with Savings Option
- Americans want presidential candidates to give health care issues more attention
- HSA Deposit Rate Update – September 2024
Health savings accounts offer investors ‘unmatched’ tax benefits, expert says. Here’s how to take advantage
Health savings accounts have become popular workplace perks with significant tax-advantaged investment opportunities — but many Americans have no idea how they work.
About 26 million people had an HSA at the end of 2023, according to Devenir, a research and investment firm based in Minneapolis. Assets in these accounts reached about $137 billion by this June, and are expected to grow to $175 billion by the end of 2026.
“We definitely are seeing growth in the number of people who sign up,” said Todd Katz, executive vice president of group benefits at MetLife. Strong market performance has also spurred growth of the investments in HSA accounts, helping to boost balances.
IRS approves ’employee choice’ program, in private letter ruling: Willis Towers Watson
Willis Towers Watson says it helped an employer get the recent Internal Revenue Service ruling approving a new type of “employee choice” benefits program.
The ruling gave the employer that asked for it a way to let employees allocate the employer’s cash contribution to four different types of arrangements: a defined contribution retirement plan, a health savings account, a retiree health reimbursement arrangement and a student loan reimbursement arrangement that’s part of an educational assistance program.
An HSA-Day Look at Where Health Savings Accounts Stand Today
Today is HSA Day. How far have Health Savings Accounts come, and where are they headed?
Health Savings Accounts turn age 20 in 2024. It’s an important milestone. And what better date to celebrate their success than HSA Day?
HSA Day was created in 2019 by the health-accounts division of WEX as a focus day of celebration and education around Health Savings Accounts. The choice of Oct. 15 was no accident. It’s exactly half a year removed from the last and the next standard due date for personal federal income tax returns. And for many Americans, it’s the beginning of open enrollment – the annual period during which workers and nongroup enrollees review their benefit choices for the following year.
In celebration of HSA Day, we’re publishing HSA Wednesday Wisdom a day early to provide a perspective on where the market is now, who’s benefitting from Health Savings Accounts, and what changes we may see in the future. This analysis relies heavily on two analyses (see here and here) by Devenir Research, which provides investment and other services to Health Savings Account administrators and also provides the most comprehensive semi-annual reporting of industry activity.
KFF 2024 Employer Health Benefits Survey: Section 8: High-Deductible Health Plans with Savings Option
To help cover out-of-pocket expenses not covered by a health plan, some firms offer high-deductible plans paired with an account that allows enrollees to use tax-preferred funds to pay cost sharing and other out-of-pocket medical expenses. The two most common types of accounts are health reimbursement arrangements (HRAs) and health savings accounts (HSAs). HRAs and HSAs are both financial accounts that workers or their family members can use to pay for health care services. These savings arrangements are often (or, in the case of HSAs, always) paired with health plans with high deductibles. This survey treats high-deductible plans paired with a savings option as a distinct plan type – High-Deductible Health Plan with Savings Option (HDHP/SO) – even if the plan would otherwise be considered a PPO, HMO, POS plan, or conventional health plan.
Americans want presidential candidates to give health care issues more attention
In a presidential campaign season dominated by the issues of inflation and immigration, two-thirds of Americans believe health care is not getting enough attention. West Health and Gallup recently surveyed nearly 2,400 people about their attitudes regarding health care and reached five conclusions.
HSA Deposit Rate Update – September 2024
As we move into the final quarter of 2024, Health Savings Account (HSA) interest rates have continued their modest ascent across all balance tiers. As of September 30th, the average rate for $1,000 balances reached 0.45%, slightly up from 0.44% in June 2024. Higher balance accounts have also seen incremental increases, with $10,000 balances now averaging 0.56% (up from 0.55%) and $50,000 balances at 0.63% (up from 0.62%).