Weekly HSA News – January 22, 2024

Proposed Legislation Opens New Doors of Opportunity for HSAs
U.S. Rep. Mike Gallagher (R-WI) introduced proposed legislation (H.R. 6857) that is unlikely to become law in its current form, but it reinforces the concept of expanding HSAs to more hard-working Americans. It also introduces a new approach to setting contribution limits that allows enrollees with higher financial responsibility to contribute more money to to their HSAs.   Read More
The Surprising Reason Your Health Plan May Not Qualify for an HSA
To get an HSA, you have to have an HSA-eligible health plan which is defined as a plan that has an annual deductible of $1,600 (individuals) or $3,200 (families) as of 2024. But here’s the catch: While many plans come with a high deductible, they might actually have an out-of-pocket maximum that’s too high to get that distinction. Here’s how to know if your plan qualifies or not.   Read More
Are Medical Equipment and Supplies Qualified Expenses?
You can generally reimburse over-the-counter medical equipment and supplies tax-free from your Health Savings Account if the equipment and supplies help “diagnose, cure, mitigate, treat, or prevent an injury, illness, or condition.” In most cases, you do not need a prescription to document that the expenses are qualified.   Read More
IRS Skeptical of Companies Marketing Pre-Tax Health Food Costs
Workers should be cautious of companies that market methods for using qualified pre-tax health savings accounts for food costs, according to an IRS official. Meal kit companies partnering with telemedicine providers to accept workers’ excess HSA and FSA dollars might be encouraging fraud, the official said at a conference hosted by the American Bar Association’s tax section.   Read More
NBT 101: A Guide to the Non-bank Trustee Designation for Health Savings Accounts
What’s a non-bank trustee or custodian? The IRS authorizes non-bank entities to provide fiduciary services to a few specified accounts, including HSAs. Earning approval from the IRS highlights an organization’s maturity and grants the organization additional abilities as a trustee and custodian for that account.   Read More
How Younger Generations are Taking Advantage of HSAs
According to data from Devenir, one in five Americans in their 30s had an HSA at the end of 2022. Additionally, younger consumers are not just saving to their HSA, they’re also taking advantage of the investing options. As younger generations embrace HSAs, it’s critical they understand how to maximize HSAs for both short- and long-term goals. Retirement plan advisors can help participants who have HSAs maximize them by sharing the following information.   Read More
Turning 55 in 2024? Here’s a Quick Way to Save Money for Healthcare
You may have heard of “catch up” contributions for 401(k)s or IRAs, but did you know there are also catch up contributions for HSAs? If you are age 55 or older (or will be turning age 55 this year) and are eligible to contribute to an HSA, you can put an extra $1,000 per year into your HSA and get a bigger tax break on your 2024 taxes. Here’s how this works.   Read More
Didn’t Max Out Your HSA in 2023? It’s Not Too Late
If you didn’t max out your HSA in 2023, you may be kicking yourself now for losing out on the tax break. But there’s some good news: You still have time to contribute to your account. HSAs (and IRAs) work differently than employer-sponsored retirement plans. As long as you put money into your HSA for 2023 by April 15 of this year, it’ll count toward last year’s tax bill.   Read More
The HSA ‘Deathbed Drawdown’: Making Tax-Efficient Distributions When There Isn’t Much Time
HSA funds can be invested and allowed to grow for the long term – which has led many people to save and invest their funds to be used for healthcare costs in retirement. For advisors who recommend HSA-maximizing strategies, it’s important to plan for potential ways to quickly draw down the account in the event the HSA owner will not outlive their HSA funds.   Read More
Challenges in Processing HSA and FSA Debit Card Payments in United Health Services’ Pharmacies
United Health Services, a reputable pharmacy chain, has been encountering difficulties with processing HSA and FSA debit card payments. The company has acknowledged the problem, assuring its customers that it is working diligently to resolve the issue.   Read More