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A summary of the articles included in the September 2021 edition:
- What’s Holding Back Health Savings Account Adoption?
- Helping Clients Harness the HSA Investing Surge
- Millennials All Aboard the HSA Bandwagon
- HSA Bank Offers Retiree Reimbursement Arrangements
- HSAs in the USA: 5 States With the Most People Covered, 5 With the Least
What’s Holding Back Health Savings Account Adoption?
The Plan Sponsor Council of America is out with its annual Health Savings Account (HSA) Survey, which finds that many organizations still do not have a formal health savings account (HSA) program, leaving it up to the employee to set up and manage the account themselves. Sponsored by Empower Retirement, the survey reports that three-quarters of employers offer health options in addition to the HSA-qualifying option, for nearly 70% of small organizations the HSA health option is the only option. For organizations that do have formal HSA programs, most make contributions, offer investment options, and pay HSA-related fees.
Helping Clients Harness the HSA Investing Surge
Health savings accounts have come a long way since their introduction in late 2003. With humble roots shrouded in confusion and misconceptions, HSAs lived their early years primarily serving as a transactional spending account similar to an FSA, serving accountholder needs focused on a 12-month cycle. But times have changed. Over the past 18 years, perpetually rising health care costs have driven a shift to more consumer-focused health care and massive upticks in leveraging high-deductible health plans paired with an HSA. Health care consumers have become better informed, more financially literate and more actively engaged in not only controlling their current health care costs, but also planning for their future health care expenses.
Millennials All Aboard the HSA Bandwagon
More than ever, people are embracing the dual benefits of a health savings account as proactive way to finance healthcare and as a way to build wealth. In fact, one in five millennials is now enrolled in a health savings account (HSA), according to a new HSA market survey. And HSA holders over age 50 held more than $44 billion in their accounts at the end of 2020, with an average balance of $4,321, the survey found. HSAs, which were established by Congress in 2003, are a relatively new option. So millennials are the first generation to take full advantage of HSAs so early in life. And for those in their 30s and younger, HSAs are more than just a mechanism to set money aside to cover healthcare costs, said Katie Patterson, employee benefits vice president at BOK Financial Insurance, Inc.
HSA Bank Offers Retiree Reimbursement Arrangements
HSA Bank, a division of Webster Bank, has expanded access to a new solution designed to support employees into retirement—the retiree reimbursement arrangement (RRA). An RRA is a solution for employers looking to help their retirees offset health care costs in retirement even if they do not offer a group retiree health plan.
HSAs in the USA: 5 States With the Most People Covered, 5 With the Least
When Devenir Research released its year-end research report on HSAs this past spring, their research revealed some startling numbers: HSA asset growth increased to $82.2 billion held in over 30 million accounts, for a year-over-year increase of 25% for assets and 6% for HSAs by December 31, 2020. Moreover, HSA investment assets rose to an estimated $23.8 billion by the end of 2020, and nearly 1.7 million accounts were investing a portion of their HSA dollars. Devenir has given another peek into the current state of HSAs with its demographic survey.