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A summary of the articles included in the March 2023 edition:
- $104 Billion Saved In Health Savings Accounts For Future Medical Expenses
- New Legislation Aims to Widen First-Dollar Telehealth Coverage
- 2023 Employee Benefits and Enrollment Trends Report
- What to Do if You Contribute Too Much to Your Health Savings Account
- New Bill Would Allow Direct-Primary Care, HSAs to Co-exist
- IRS Addresses Questions About Medical Expenses Related to Nutrition, Wellness and General Health
$104 Billion Saved In Health Savings Accounts For Future Medical Expenses
Devenir, a national leader in providing investment solutions for health savings accounts (HSAs), released today the results of its 25th semi-annual health savings account survey and resulting research report. Devenir found that there is about $104 billion saved in 35.5 million HSAs at the end of 2022.
- Account growth remains strong. While health savings account asset growth in 2022 was held back by significant stock market headwinds, the growth in the number of HSAs accelerated. At the end of 2022, there were $104 billion in HSA assets held among 35.5 million accounts, a year-over-year increase of 6% for assets and 9% for accounts.
- HSA investment assets resume growth. After enduring one of the worst stock markets in decades during the first half of the year, HSA investment assets resumed their growth during the 2nd half of the year, growing 9% during the period to end 2022 with $33.8 billion (down 2% from the end of 2021).
- Growth of HSA accounts investing slows. More HSAs than ever are investing but the rapid growth seen over the last few years has slowed as we saw significant market headwinds and rising rates in 2022. Almost 2.6 million health savings accounts have at least a portion of their HSA dollars invested, representing over 7% of all accounts.
- HSA contribution and withdrawal activity remains strong. Account holders contributed $47 billion to their accounts in 2022 (up 11% from the year prior) and withdrew $34 billion from their accounts during the year (up 11% from year prior).
New Legislation Aims to Widen First-Dollar Telehealth Coverage
A group of six US representatives and senators introduced an extension of the CARES Act known as the “Telehealth Expansion Act,” which would allow Americans with Health Savings Accounts (HSA) to gain telehealth access without the need to meet a deductible.
Reps. Michelle Steel (R-CA), Susie Lee (D-NV), Adrian Smith (R-NE), and Brad Schneider (D-IL), and Sens. Steve Daines (R-MT) and Catherine Cortez Masto (D-NV) introduced the new legislation.
Signed in March 2020, the CARES Act allowed HSA-qualified high-deductible health plans to cover telehealth services prior to reaching the deductible amount. Additionally, it allowed individuals to select and purchase telehealth services independent of their high-deductible health plan without any impact on their HSA eligibility.
The new act would make this waiver permanent.
2023 Employee Benefits and Enrollment Trends Report
Employers created their 2023 employee benefit strategy amidst a variety of challenges including economic uncertainty, political change and global events. Meeting the needs of a diverse workforce is an additional challenge given the changing composition of U.S. households.
Alight recently published The 2023 Benefits and Enrollment Trends report, which takes an in-depth look at some of the key benefits employers offered to their workforce. It looks at how employees enrolled in those benefits during the 2022 annual enrollment season. The report includes data from more than 450 organizations employing over 9.5 million employees.
What to Do if You Contribute Too Much to Your Health Savings Account
One of the better things about a Health Savings Account (HSA) is you don’t have to figure out how much to contribute before the beginning of the calendar year, and you can change your mind during the year. You can even wait until the year is over to figure out how much to contribute.
In the latter case, it is in your interest to figure out how much you spent on health care expenses out-of-pocket during the prior calendar year and make sure that you contribute at least enough to your HSA to cover all of your out-of-pocket expenses from that year, if you are able and assuming that you haven’t already hit the limit for the prior year.
To make sure you’re making the most of your HSA, it’s important to understand the contribution rules and guidelines. Whether you make the contributions or the money comes from your employer, it’s easy to go over the limit if you’re not careful.
New Bill Would Allow Direct-Primary Care, HSAs to Co-exist
Direct-primary care arrangements don’t fit with Health Savings Accounts in two important areas. Perhaps that’ll change this year.
Four US senators – two Democrats and two Republicans – recently introduced legislation to allow patients to enter into direct-primary care relationships, remain eligible to fund a Health Savings Account, and reimburse the monthly fee for this medical arrangement tax-free from a Health Savings Account.
This isn’t the first time such legislation has been proposed. But despite the benefits to patients’ health and finances, the concept hasn’t become law.
IRS Addresses Questions About Medical Expenses Related to Nutrition, Wellness and General Health
The Internal Revenue Service today posted frequently asked questions that address whether certain costs related to nutrition, wellness and general health are medical expenses that may be paid or reimbursed under a health savings account (HSA), health flexible spending arrangement (FSA), Archer medical savings account (Archer MSA) or health reimbursement arrangement (HRA).
These FAQs are part of the National Strategy on Hunger, Nutrition, and Health. The National Strategy provides a roadmap of actions the federal government will take to end hunger and reduce diet-related diseases by 2030.
Generally, a deduction is allowed for expenses paid during the taxable year for medical care if certain requirements are met. Alternatively, medical expenses are eligible to be paid or reimbursed under an HSA, FSA, Archer MSA or HRA. The FAQs address issues such as whether the cost of nutritional counseling, weight-loss programs, gym memberships and treatment for substance use disorders are considered medical expenses that may be paid or reimbursed under an HSA, FSA, Archer MSA or HRA.