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A summary of the articles included in the November 2021 edition:
- Lively Raises $80 Million Series C to Make HSAs the Next 401(k)
- Announcing a New Cato Initiative: Make Health Savings Accounts Work for Everyone
- Employers Should Stress the ‘Savings’ in HSA Education
- EBRI: HSA Holders Build Balances Despite Pandemic
- Unlocking the Power of HSAs For Employers and Employees
- Morningstar Finds Health Savings Account Providers Have Improved Offerings, But Transparency and Fees Remain Hurdles
Lively Raises $80 Million Series C to Make HSAs the Next 401(k)
Lively announced an $80 million Series C round led by B Capital Group, with participation from Telstra Ventures and existing investor, Costanoa Ventures. This brings the company’s total funding to more than $120 million to accelerate its mission of helping millions of Americans save for healthcare and retirement.
Over the last year, Lively has experienced exponential growth through all facets of its business, paving the way for the future of health savings accounts. Within the last four months alone, the company has partnered with BMO Harris, received an IRS Non-Bank Trustee designation, and surpassed $500 million in HSA assets.
Announcing a New Cato Initiative: Make Health Savings Accounts Work for Everyone
The most important health care right is the right to make one’s own health decisions. To restore that right, the Cato Institute is launching an initiative to make health savings accounts (HSAs) work for everyone. How do HSAs restore health care rights?
An essential part of the right to make one’s own health decisions is the right to control one’s income. Every individual has a right to make use of their earnings according to their values. Any other principle would create inequalities between citizens and government officials who could impose their values on others. The right to control one’s earnings includes the right to choose whether, how much, and how to spend one’s money on health insurance and medical care. If you don’t control the money that purchases your health care, you don’t control your health care.
Employers Should Stress the ‘Savings’ in HSA Education
This open enrollment season, employees are not connecting the link between health savings accounts (HSAs) and long-term savings, according to a survey from Alegeus.
While most consumers Alegeus polled in its “2021 Pre-Open Enrollment Survey” are actively saving for retirement (53%) and many consider themselves savvy investors (45%), a majority do not see HSAs as a means for achieving either. Only 32% say they understand that HSAs can help with long-term expenses, and only 17% invest HSA funds for growth.
Alegeus says this presents areas where benefit administrators and employers can focus their education efforts.
EBRI: HSA Holders Build Balances Despite Pandemic
A new study by the Employee Benefit Research Institute on ways account holders use their HSAs finds that the average account balance rose by more than a third in 2020.
Continuing a trend from previous years, the average HSA balance rose from $2,412 at the beginning of 2020 to $3,290 by the end of the year, according to Health Savings Account Balances, Contributions, Distributions, and Other Vital Statistics: Evidence from the EBRI HSA Database. “Encouragingly, this happened despite a pandemic in which the labor market experienced a significant disruption and despite slightly smaller average contributions than in previous years,” the report emphasizes.
Unlocking the Power of HSAs For Employers and Employees
The third annual HSA Day occurred on October 15, an event that falls at the halfway point of the typical tax-filing year (returns due April 15 most years). The timing is appropriate since Health Savings Accounts offer distinct tax savings for owners.
For those Americans with an HSA-qualified health plan, an HSA is the only account through which they have the opportunity to enjoy tax savings on contributions (including payroll-tax savings on pre-tax payroll deductions to fund their accounts), any earnings on those contributions, and distributions (for a wide range of qualified medical expenses).
Morningstar Finds Health Savings Account Providers Have Improved Offerings, But Transparency and Fees Remain Hurdles
Morningstar published its fifth annual landscape study on health savings accounts (HSAs) available to individuals. Morningstar evaluated 11 of the most prominent HSA providers’ offerings for two different use cases: as an investment account to save for future medical expenses and as a spending account to cover current medical costs. This year’s study finds the best HSA provider for investors is Fidelity, and the best HSA providers for spenders include Fidelity and Lively.
Providers have made progress over the past year by cutting fees, streamlining investment menus, and offering higher quality funds, yet there’s still room for improvement.