Health Savings Accounts Grow
[T]he number of people who use HSAs and HRAs continues to climb, as do their contributions to the accounts, according to [EBRI]…
Forty-two percent of employees said they contributed at least $1,500 to an HSA last year, while just 15 percent said they made no contribution, the institute found…
Seventy percent of workers with an HSA or HRA said their employer contributed to their accounts, and the percentage of employers making contributions of more than $1,000 rose from 14 percent to 22 percent.
Dr. Goodman – leading the way in health care!
It would be interesting to see an SES breakdown of the 30 percent of workers who contribued to their HSA or HRA without any support from their employer…
Given the bewildering ACA restrictions on HSA funds and how they can be spent, this is encouraging. The question is what will these numbers look like in 2015?
I would think that HSA’s ought to be allowed to be rolled over once the account holder passes away. Is this the case? I know it’s a little bit out of context from the post, but reading this made me think about this other issue.
The ACA needs to ensure there are health plans offered in each state exchange that functions like an HRA. A portion of the premiums should be used to fund an account that is coupled with a high-deductible plan.
I would like to see the HCA restriction on OTC medication removed.
I agree with Gabriel and E. Carr. There is no reason for “bewildering ACA restrictions on HSA funds and how they can be spent”.
According to the PPACA, part of the HSA funds count toward the deductible, the part paid by employers.
Regarding HRAs, the money available in the current year counts toward the deductible.
The really big advantage resides in excepted benefits, which are limnited benefit plans under $250,000.
Incorporating these limited benefit plans with a major medical plan is absolutely kosher under the PPACA. For example, if your limited benefit plan had $50,000 of benefits (any type of qualified medical benefit), you could raise your deductible to $50,000 shaving off about 80% of a traditional premium.
Don Levit
That’s an interesting question Andrew.. Of course rolling over an HSA would have to be taxable.
Andrew and Jordan: What if the deceased’s HSA funds were rolled directly into an HSA of a beneficiary to be used only for medical expenses? Or handled as with an IRA where it’s re-titled as the IRA of John Doe, deceased, FBO…. (or something like that IIRC from my quick skimming of past retirement fund articles.)
Do you think that is possible? Is this addressed anywhere in HSA law & regulations?
I am of the school that believes that employing HSAa and high deductible insurance for everyone (subsidized for those who need help) would minimize cost and maximize benefit. But obviously, that puts control for one’s routine health care in one’s own hands rather than the bureaucrats’, and therefore is undesirable to the current political trend.
ColoComment, Andrew, and Jordan: I was able to find this here: http://www.hsaforamerica.com/gov-info.htm#969
According to IRS Publication 969:
Death of HSA Holder
You should choose a beneficiary when you set up your
HSA. What happens to that HSA when you die depends
on whom you designate as the beneficiary. Spouse is the designated beneficiary.
If your spouse is the designated beneficiary of your HSA, it will be treated as your spouse’s HSA after your death.
If your spouse is not the designated beneficiary of your HSA:
* The account stops being an HSA, and
* The fair market value of the HSA becomes taxable to the beneficiary in the year in which you die.
If your estate is the beneficiary, the value is included on your final income tax return.
TIP – The amount taxable to a beneficiary other than the estate is reduced by any qualified medical expenses for the decedent that are paid by the beneficiary within 1 year after the date of death.
Jim McFadden, many thanks for doing the work for us!
(If I weren’t such a lazy curmudgeon, I probably could have turned that up myself, eh?)
No worries ColoComment. As an HSA owner, I’d like to think I’m up on things. When I saw these questions, I realized I wasn’t so sure. A little digging helped me find the answer. In the end, I just needed to know myself and thought I’d share.
This is a welcome change. I hope this system gets more mainstream attention. Plus, I will be interested to know what the road blocks are for majority of the people into adopting HSA?