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A summary of the articles included in the January 2020 edition:
- HSA Minimum Cash Balances Come With an Unseen Price
- Health Savings Account Balances, Contributions, Distributions, and Other Vital Statistics, 2018: Statistics From the EBRI HSA Database
- Following Up on HSAs After Open Enrollment
- Signing Up for an H.S.A.? First Figure Out How You’ll Use the Money
- How To Maximize Employee Participation in HSA Plans
- Credit Union HSA Update: 9/30/2019
HSA Minimum Cash Balances Come With an Unseen Price
If you are familiar with HSAs, you probably know that many HSA providers impose minimum cash balances on their account holders. These minimum cash balances mean account holders must maintain a set amount in cash, typically $1,000 or $2,000, before they can invest additional funds. You may also have heard minimum cash balances described as a way to make sure account holders have sufficient funds on hand in case they are required to pay out of pocket for a large medical expense. However, rather than benefiting account holders, minimum cash balances act as a hidden cost by needlessly holding funds captive and throttling account holders’ ability to grow their savings.
Health Savings Account Balances, Contributions, Distributions, and Other Vital Statistics, 2018: Statistics From the EBRI HSA Database
EBRI has undertaken a series of annual reports drawing on cross-sectional data from the EBRI HSA Database. In the sixth annual report of this kind, EBRI examines account balances, individual and employer contributions, distributions, invested assets, and account-owner demographics as of year-end 2018.
Following Up on HSAs After Open Enrollment
“The best time to engage with employees and educate them about health savings accounts is after open enrollment,” says Steve Neeleman, founder and vice chairman of HealthEquity in Draper, Utah. The 2019 Bank of America Workplace Benefits Report found 57% of employees say they have a good understanding of health savings accounts (HSAs). However, only 11% of employees were able to correctly identify four basic attributes of HSAs.
Signing Up for an H.S.A.? First Figure Out How You’ll Use the Money
The number of health savings accounts continues to grow, but figuring out which plan will work for you may depend on how you will use the money, a new analysis finds. Do you intend to use it for current medical expenses or to save the money and invest it for future costs, perhaps in retirement – as if it were a 401(k) for health care?
How To Maximize Employee Participation in HSA Plans
HDHPs not only offer employees the opportunity to save on their premium contributions, they also provide access to what are commonly touted as triple-tax-advantaged HSAs. HSA users can put away money tax-free, and account distributions for eligible healthcare costs aren’t subject to federal income tax. Plus, these accounts offer users the option to invest and any investment returns aren’t subject to taxation. Not even the storied 401(k) promises this much bang for the proverbial buck. In fact, HSAs offer the best of pre-tax 401(k) and Roth contributions.