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A summary of the articles included in the May 2025 edition:

  • People Are Using It to Pay for Cold-Plunge Tubs—and to Stockpile Money for Retirement. It Started Out as Something Else Entirely.
  • Lively Launches AI-Powered Bundle to Eliminate Repetitive HR Tasks and Save Benefit Teams Time
  • High-Deductible Health Plans Should Fight Chronic Disease Harder, Lawmakers Tell IRS
  • HSA Bank Health & Wealth Index: Despite Positive Lifestyle Changes Employees are Stressed About Finances
  • Retiring Early? HSA Funds Will Not Provide a Tax-free Bridge to Medicare at Age 65.
  • Employers Support HSA Changes To Make Them More Flexible


People Are Using It to Pay for Cold-Plunge Tubs—and to Stockpile Money for Retirement. It Started Out as Something Else Entirely.

Morgan Goodstadt made a radical change about six months ago. The registered dietitian runs her own virtual private practice, Good Nutrition, in Greenwich, Connecticut, where she offers one-on-one nutrition counseling. Her patients are a mix: Some have diabetes, some deal with autoimmune conditions or digestive issues, and others are just looking to be more health-conscious in their food choices. It’s all something any nutrition coach might encounter—except, at Good Nutrition, patients can now pay using their HSA or FSA accounts.

For the uninitiated: Health savings accounts and flexible spending accounts are held in addition to regular health insurance and allow people to set money aside to pay for qualified medical expenses. That typically means anything that falls under the rubric of traditional medical, dental, and vision services, as well as the costs of prescription drugs. According to research published in JAMA Health Forum last year, almost a quarter of U.S. residents ages 19 to 64 who have employer-sponsored health insurance also have an HSA or FSA.

More recently, however, Americans with HSAs and FSAs are finding ways to use these accounts more creatively.

Lively Launches AI-Powered Bundle to Eliminate Repetitive HR Tasks and Save Benefit Teams Time

Lively announced the launch of its new AI-powered bundle designed to reduce administrative burden for HR and benefits teams, while helping employees confidently navigate their health and wellness benefits.

This new offering enhances the Lively platform with a suite of AI tools that simplify the most time-consuming parts of benefits management—from implementation and onboarding to employee support and reimbursement processing. The launch comes at a critical time, as HR teams continue to navigate lean staffing models and rising demands during periods like Open Enrollment.

“Benefits leaders are under pressure to do more with less,” said Alex Cyriac, CEO and Co-Founder of Lively. “Our new AI bundle automates the repetitive, reduces the noise, and delivers real-time support to employees—without adding to HR workload.”

High-Deductible Health Plans Should Fight Chronic Disease Harder, Lawmakers Tell IRS

Three House members are keeping up the fight to make the health savings account program friendlier to people who already have health problems.

The lawmakers sent a letter asking the Internal Revenue Service to expand the list of chronic disease management items that an HSA-compatible “high-deductible health plan” can cover before the patient reaches the plan deductible.

The lawmakers want IRS officials to add items to the list in IRS Notice 2019-45, a batch of HDHP chronic disease benefits guidance that the IRS released during President Donald Trump’s first term in office. The notice already lets HDHPs provide pre-deductible coverage for some items.

HSA Bank Health & Wealth Index: Despite Positive Lifestyle Changes Employees are Stressed About Finances

HSA Bank announced results of the eighth Health & Wealth Index℠, highlighting trends and generational differences among employees and their finances, health and wellbeing.

The Index reveals positive lifestyle changes along with high confidence and awareness among employees regarding their benefits. However, confidence drops when employees look ahead, with 41% reporting they are unprepared financially to retire and almost two-thirds expressing concern about current or future medical costs.

Retiring Early? HSA Funds Will Not Provide a Tax-free Bridge to Medicare at Age 65.

Question: I plan to retire before age 65. Once my COBRA coverage expires, I’ll have to buy a nongroup plan to provide coverage until I turn age 65 and am eligible to enroll in Medicare. Can I reimburse premiums for this nongroup coverage tax-free from my Health Savings Account?

Answer: No. Medical premiums for pre-Medicare coverage are expenses qualified for tax-free distributions from your Health Savings Account only if you’re collecting federal or state unemployment benefits or if you continue your former employer coverage by exercising your COBRA rights.

Any other premiums for medical coverage are non-qualified expenses. If you pay premiums for non-qualified coverage from your Health Savings Account prior to age 65, you include the distribution in your taxable income. And unless you’re disabled, you also pay a 20% additional tax on these withdrawals.

Employers Support HSA Changes To Make Them More Flexible

Health Savings Accounts and qualifying High-Deductible Health Plans have become an integral part of many employers’ health benefit offerings. A number of changes to rules governing HSAs and HDHPs have been proposed that would make them more accessible and flexible in terms of who could access them (for example, making HSAs available to everyone, not just those enrolled in a high-deductible health plan, allowing Medicare beneficiaries to make/receive HSA contributions), the annual HSA contribution amounts, and types of reimbursable HSA and pre-deductible HDHP covered expenses.

In our recent Survey on Health Policy 2025, with more than 500 organizations responding, we asked employers to rate a number of proposals in terms of their importance to their organization and employees on a scale of 0-4, with 0 being “Oppose the change” and 4 being “Extremely important.” Among large employers (500 or more employees), the highest average rating was for allowing the use of HSA funds for long-term care services – which employers may have assumed was already allowed. After that, employers were most likely to strongly support allowing telemedicine and mental health services to be covered pre-deductible without interfering with HSA eligibility, and higher annual HSA contributions limits.