PLANSPONSOR - May - June 2023 - 6

RULES & REGULATIONS
From Washington and the Courts
more people with a high-deductible health
plan are investing in an HSA.
A primary benefit of the accounts
is that they offer a triple tax advantage:
Contributions go in tax-free, the funds
grow tax-free, and they can be withdrawn
tax-free.
A survey from the Employee Benefit
Research Institute showed that 24% of
workers were enrolled in an HSA-eligible
health plan last year. However, the same
survey found that high deductibles are
also prominent
in non-HSA plans, with
employee-only deductibles averaging
$1,451 in health maintenance organizations
and $1,322 in preferred provider organizations
also last year.
" In other words, many workers are
Using HSAs
With Social Security
The Social Security Administration
recently announced that the combined
accounts of the Old Age and Survivors
Insurance
and Disability
Insurance
Trust Fund, together simply known as
Social Security, are on track to fall short
a year earlier than originally projected.
As a result, says Kevin Robertson, chief
revenue officer at health savings account
provider HSA Bank, Congress may raise
the age at which one may start claiming
Social Security retirement income
payments, and people should not plan
to rely solely on those to pay for their
medical expenses in retirement.
6 PLANSPONSOR.COM May - June 2023
retirement,
" If you think about it, in a person's
health-care
expenses will
be the largest single category of need, "
Robertson says. " Beyond rent or mortgage
or living expenses, health care for
the average American is very expensive.
... When you're older, the likelihood of
having health issues accelerates. "
Inflation is also driving up the cost
of health care and prescription drugs,
which in turn increases the cost for plan
sponsors. According to data collected by
Mercer, employers project a 5.4% average
increase in health benefit costs per
employee this year.
Meanwhile, HSAs reached $112.5
billion in assets at the end of January, up
8% since year-end 2022, indicating that
Art by David Plunkert
enrolled in health plans with deductibles
high enough to be HSA-eligible
but are not technically enrolled in an
HSA-eligible health plan and thus are
unable to contribute to an HSA, " the EBRI
report states. " Something is holding these
employers back from offering HSA-eligible
health plans to give workers the means to
pay their out-of-pocket expenses through
HSAs. " Only participants in so-called
high-deductible health plans may put
money into an HSA.
Robertson says about 100 million
Americans are currently able to use the
benefits of an HSA, and that number
grows every year.
A recent bill introduced in Congress
aims to expand the use of HSAs to a broader
cross section of Americans, Robertson
says. Titled the Health Savings for Seniors
Act, the proposed bill would allow people
who are enrolled in any type of Medicare to
contribute to an HSA.
" [The bill] would dramatically open
up the ability for seniors to better afford
health-care expenditures, [to] save for
their future, and stretch those healthcare
dollars, " Robertson says. " Even
if they use the accounts solely as an
expense pass-through, they would earn
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PLANSPONSOR - May - June 2023

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