PLANSPONSOR - June/July 2019 - 13

A Better HSA Savings Option for Seniors
Should legislation
ONE of the most frustrating components
of Medicare interactions with health
savings accounts (HSAs) involves seniors
who want to keep working and keep
saving in one of these accounts. Labor
force participation among people 65 and
older rose to 25.2% in February, from
24% last February, according to the U.S.
Bureau of Labor Statistics.
If working seniors elect to take Social
Security benefits, they are automatically
enrolled in Medicare A. Kevin Robertson,
senior vice president, chief revenue
officer at HSA Bank, says, " If you don't
want that to happen, you have to take an
active effort to disenroll from Medicare.
As soon as these participants are covered
by Medicare, their ability to contribute to
an HSA ceases-many participants are
unaware of this. "
According to Robertson, participants
who work in a company with fewer than
20 employees have no choice but to go
with Medicare. But for those at organizations
with a larger staff, there are efforts
underway to address this conflict-in
fact, there have been multiple bills over
the years, with multiple iterations.
Last July, three bills related to
consumer-directed health care plans
(CDHPs) were passed by the House Ways
and Means Committee. They were brought
forward to the House, and two of them
were passed soon after. The provisions
in H.R. 6311: Increasing Access to Lower
Premium Plans and Expanding Health
Savings Accounts Act of 2018, for one,
were written to let participants enrolled
in Medicare Part A and a qualified highdeductible
health plan (HDHP) make
contributions after Medicare enrollment.
J. Kevin A. McKechnie, executive
director, HSA Council, at the American
Bankers Association, says, " Every day,
10,000 people become eligible for retirement,
and some portion of those people
pass Congress,
it would help
these participants
and save the
government
money.
have an employer HSA and want to keep
contributing to it because they're going
to work longer. The ability to get the tax
savings plus continue to save for health
care costs when they're in retirement is
important. But being eligible for Medicare
is disqualifying. " Currently, McKechnie
says, these workers can keep their HSAs
and use them for health care expenses but
make no further contributions.
Should the aforementioned legislation
pass Congress, it would help these
participants and save the government
TALKING POINTS
Health Savings Accounts Grow
$839
The average
employer contribution
to a worker's
HSA for 2018, up 33%
from 2017.
$53.8b
Total HSA assets, up 19%
*Number combines both employer and consumer HSAs.
Source: Devenir
25mm+
Total HSAs*, up 13%
money. " It's a saver for the government.
It's in President Trump's budget. If legislation
passed, employees would not be
using Medicare first. They'd be using it
second. The portion of people who are
in the HSA stay in the HSA. That's our
goal, and that's why it attracted bipartisan
votes. "
The bill will need to pass the House
again. As it is a revenue bill, it must start in
the Ways and Means committee, by constitutional
dictate. He adds, " There's a debate
in the House leadership about sending
a revenue bill to the Senate, because that
would allow the Senate to put its own provisions
in or strip everything out and send
it back. " Of course, that may not happen,
he says. " But, in the dynamics of how
Congress works, if there is anything in the
revenue bill that has to happen, when the
Senate sends it back as a 'take it or leave it'
proposition at the end of next year, it's not
as favorable a position for the Democratic
House to be in. Therefore, the House is
reluctant to send bills over now. "
-Judy Faust Hartnett
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