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A summary of the articles included in the July 2023 edition:
- HSA Deposit Rate Update – June 2023 Update
- Fidelity® Releases 2023 Retiree Health Care Cost Estimate: For the First Time in Nearly a Decade, Retirees See Relief as Estimate Stays Flat Year-over-Year
- SHRM Releases 2023 Employee Benefits Survey Results
- Health Savings Accounts: 2024 cost-of-living adjustments
- Time to Turbo-Charge Health Care Price Transparency
HSA Deposit Rate Update – June 2023 Update
Inflation proved to be higher and stickier than Fed officials had previously thought, leading to the most aggressive rate hiking cycle in decades. The Fed raised the federal funds rate 10 consecutive times from March 2022 through May 2023 for a total of 500 basis points. This rattled equity and bond markets and eventually played a role in three of the largest bank failures in US history, each occurring within the last few months. The federal funds rate currently sits in the range of 5.00% – 5.25% and Fed chairman Jerome Powell has reiterated that they are strongly committed to bringing inflation down to their 2% target and will remain data-dependent when it comes to future rate decisions. Members of the Fed have signaled that additional rate hikes may be needed in the future after leaving rates unchanged in their last meeting.
Fidelity® Releases 2023 Retiree Health Care Cost Estimate: For the First Time in Nearly a Decade, Retirees See Relief as Estimate Stays Flat Year-over-Year
Fidelity Investments® recently shared its 22nd annual Retiree Health Care Cost Estimate, revealing that a 65-year-old retiring this year can expect to spend an average of $157,500 in health care and medical expenses throughout retirement. Fidelity’s 2023 estimate remains the same as last year, due to expected limits to retiree out of pocket costs for prescription drugs starting in 2025. This is the first time in nearly a decade that the anticipated health care costs for retirees have stayed flat year-over-year. The estimate assumes retirees are enrolled in traditional Medicare, which between Medicare Part A and Part B covers expenses such as hospital stays, doctor visits and services, physical therapy, lab tests and more, and in Medicare Part D, which covers prescription drugs.
SHRM Releases 2023 Employee Benefits Survey Results
The number of employers offering various family support and leave benefits has increased significantly, according to the 2023 SHRM Employee Benefits Survey results released today at the SHRM Annual Conference & Expo. The need for heightened family support during the pandemic seems to have evolved into long-term parental benefits. Significant increases from 2022 were seen in the share of organizations offering paid maternity and paternity (up 5 percentage points each) or parental leave (up 6 percentage points), as well as adoption leave (up 6 percentage points).
Health Savings Accounts: 2024 cost-of-living adjustments
Earlier this year the Internal Revenue Service (IRS) released Revenue Procedure 2023-23 announcing cost-of-living adjustments (COLAs) applicable to Health Savings Accounts (HSAs) for 2024.
After application of the COLA rules, changes for 2024 include an increase in the contribution limits applicable to individuals who have self only or family high-deductible health plan (HDHP) coverage. Additionally, the minimum deductible amount and maximum out-of-pocket expense limits that are factors in determining whether a health plan is an HSA-eligible HDHP will increase for 2024.
Time to Turbo-Charge Health Care Price Transparency
People should be told upfront what they will be charged for medical services. So why do so many Americans suffer sticker shock when the bill arrives?
The main problem is that America’s health care markets are highly concentrated. This limits consumer choice, as well as plan and provider competition.
Thankfully, policies to promote greater health care price transparency are garnering rare bipartisan support in Washington.