Each month Devenir highlights a selection of articles to keep you abreast of the latest trends and developments in the HSA marketplace.
A summary of the articles included in the March 2021 edition:
- WEX Signs Definitive Agreement to Acquire Certain HSA Assets of HealthcareBank
- Lively Releases 2020 Data Showing Volatile Healthcare Spending Due to COVID-19
- HSAs, an Adviser Favorite, Just Don’t Get Much Love
- HealthEquity Announces Closing of Follow-on Offering of Common Stock
- Some Participants Reducing 401(k) Deferrals to Contribute to HSAs
- The Business of Healthcare Podcast, Episode 79: An Overview of Health Savings Accounts
- HSA Investment Advice: Spending Vs. Investing Your HSA Funds
WEX Signs Definitive Agreement to Acquire Certain HSA Assets of HealthcareBank
WEX Inc. announced the signing of an agreement to acquire certain HSA assets of HealthcareBank, the custodian bank for customers of WEX’s Health division in order to better capture the economics from these HSA assets.
Lively Releases 2020 Data Showing Volatile Healthcare Spending Due to COVID-19
Lively released its 3rd annual HSA Spend Report, giving a view into how and where consumers spend on healthcare costs each year. Findings show that the COVID-19 pandemic had a serious impact on HSA spending in 2020. The average account holder’s routine visits saw a sharp decline when compared to 2019: doctors visit and services (-3%), hospital (-9%), lab work (-15%), and dental spending (-9%). There were also large spending increases for prescription drugs (+32%) and chiropractic care (+20%).
HSAs, an Adviser Favorite, Just Don’t Get Much Love
Health savings accounts are one of the top recommendations advisers make for clients, but the savings vehicles are scarcely used – and when they are, they are almost always treated like checking accounts. As every financial professional worth their salt knows, HSAs are a unicorn in the tax world. The accounts are funded with pretax income, grow tax-free and are not taxed when used for eligible expenses – the “triple tax” benefits for which they are so renowned. They represent one of the most efficient ways to squirrel away money for retirement.
HealthEquity Announces Closing of Follow-on Offering of Common Stock
HealthEquity announced the closing of the underwritten public offering of 5,000,000 shares of its common stock. The gross proceeds to HealthEquity from the offering, before underwriting discounts and commissions, were $401,500,000. Additionally, HealthEquity has granted the underwriter a 30-day option to purchase up to an additional 750,000 shares. HealthEquity intends to use the net proceeds from this offering for potential acquisitions, repayment of indebtedness and other general corporate purposes.
Some Participants Reducing 401(k) Deferrals to Contribute to HSAs
Industry sources have recommended that participants adopt a savings hierarchy for retirement plan and health savings account contributions. More than half (56%) of 401(k) participants reduced their retirement plan contributions in the first year that they made health savings account (HSA) contributions, according to a study conducted by the EBRI.
The Business of Healthcare Podcast, Episode 79: An Overview of Health Savings Accounts
In this episode, host Dr. Bob Kaiser speaks with J. Kevin A. McKechnie, executive director, Health Savings Account Council at the American Bankers Association. They discuss what HSAs are and how they can help consumers with qualifying high-deductible health plans better manage their medical expenses.
HSA Investment Advice: Spending Vs. Investing Your HSA Funds
If you’re unsure whether to spend or invest your HSA funds, you’re not alone. Only 5% of HSA holders invest at least a portion of their funds, according to industry tracker Devenir. One reason people don’t invest HSA funds is they need the money to pay for medical expenses. But for those who don’t, a lack of understanding about their investment options could be holding them back.