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<< Older News  |  September 25, 2020

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All News > HSAs

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2020 Midyear Devenir HSA Research Report
Devenir Link to more items from this source
Sept. 1, 2020

"Health savings account asset growth remained strong, increasing to $73.5 billion in assets held in over 29 million accounts, a year-over-year increase of 19% for assets and 12% for health savings accounts for the period ended June 30th, 2020.... HSA investment assets increased to an estimated $17.6 billion at the end of June, up 32% year-over-year. On average, investment account holders hold a $15,445 total balance."

Tags: HSAs

2020 Benchmarking Survey of Health Savings Accounts (PDF)
Plan Sponsor Council of America [PSCA] Link to more items from this source
Aug. 20, 2020

48 pages. "The average participant contribution in 2019 was $2,595, the same as in 2018. The average account balance at the end of 2019 was $5,627, a slight increase from an average of $5,239 in 2018. The vast majority of responding organizations (83.8 percent) offer investment options for HSA contributions, though more than 80 percent require a minimum balance of at least $1,000 to inv est assets. While mutual funds dominate the types of investments offered, nearly a fourth of respondents also offer self-directed brokerage accounts -- including nearly half of smaller employers."

Tags: HSAs  •  Health Plan Design

Making the Most of Health Savings Accounts During COVID-19
Forbes Link to more items from this source
Aug. 18, 2020

"Many employees who have HSAs don't understand how they work or how contributions can grow.... A key point of confusion: the difference between a Health Savings Account and a Flexible Savings Account (FSA).... Another thing that confounds some about HSAs: how to use them as investment accounts for retirement.... The CARES Act broadened HSA reimbursements in a number of ways, and 13% of HSA participants surveyed by Charles Schwab said they've used the accounts for coronavirus-related expenses."

Tags: Coronavirus (COVID-19)  •  HSAs

Editor's Pick Health Savings Accounts (HSAs) (PDF)
Congressional Research Service [CRS] Link to more items from this source
[Guidance Overview]
Aug. 14, 2020

28 pages. "This report summarizes the principal rules governing HSAs, covering such matters as eligibility, qualifying health insurance, contributions, withdrawals, and tax advantages. It incorporates changes made to HSAs as a result of the Coronavirus Disease 2019 (COVID-19) pandemic and corresponding recession. It concludes with a discussion of HSA data limitations and recent trends in HDHP enrollment and HSA utilization." [R45277 updated Aug. 13, 2020]

Tags: Coronavirus (COVID-19)  •  HSAs  •  Health Plan Design

American Benefits Council Comment Letter to IRS on Proposed Regs Regarding Certain Medical Care Arrangements
American Benefits Council Link to more items from this source
[Opinion]
Aug. 11, 2020

"[T]he Council's comments address a number of areas in which further clarity is needed on the interaction of [direct primary care (DPC)] arrangements and account-based plans."

Tags: HSAs  •  Health Plan Design

Editor's Pick When Can an Employer Have Mistaken HSA Contributions Returned by the HSA Custodian?
ABD Insurance & Financial Services Link to more items from this source
[Guidance Overview]
Aug. 4, 2020

"Although the general rule is that all employer HSA contributions are nonforfeitable, there are three situations that permit employers to correct an error by requesting the HSA custodian return mistaken contributions.... [1] Employee was never HSA-eligible ... [2] Employer contributions exceed statutory limit ... [3] Clear documentary evidence of an administrative or process error."

Tags: HSAs  •  Health Plan Administration

Editor's Pick Use of HSAs Among Adults Enrolled in High-Deductible Health Plans
JAMA Network Link to more items from this source
July 27, 2020

"In this national survey of 1637 respondents, approximately 1 in 3 adults enrolled in a high-deductible health plan did not have a health savings account. Among those with a health savings account, most had not contributed money into it in the last year ... These findings suggest that ... targeted interventions could enhance uptake of and contributions to health savings accounts."

Tags: HSAs  •  Health Plan Design

Editor's Pick The HSA Proportional Contribution Limit
ABD Insurance & Financial Services Link to more items from this source
[Guidance Overview]
July 20, 2020

"The standard rule is that employees who are HSA-eligible for only a portion of the calendar year have a reduced HSA contribution limit.... [A] special rule known as the 'last-month rule' may apply to permit the mid-year enrollee to contribute up to the full statutory limit -- even though the employee was not HSA-eligible for the full calendar year."

Tags: HSAs  •  Health Plan Design

FAQ on Extended Period for Flexible Spending Accounts
TRI-AD Link to more items from this source
[Guidance Overview]
July 13, 2020

"[IRS Notice 2020-29] does not answer all the necessary questions surrounding these changes. The biggest challenge with the extension is where the employee moved from a non-HDHP to an HDHP during open enrollment, had a [general purpose health FSA (GPHFSA)] account balance as of the end of the 2019-2020 run-out period, and has participated in an HSA in the new plan year."

Tags: Cafeteria Plans  •  Coronavirus (COVID-19)  •  HSAs  •  Health Plan Design

Direct Primary Care Gains Ground as Employer Strategy
Mercer Link to more items from this source
July 13, 2020

"The higher deductibles go, the more attractive [direct primary care (DPC)] will become.... One drawback of the DPC arrangement for employers is that they don't receive medical claims or other data on their members' encounters with DPC providers. This limits reporting to support quality metrics which is the opposite direction of making quality data more readily available so consumers can make informed decisions on where to seek care."

Tags: HRAs  •  HSAs  •  Health Plan Design

Credit Union HSA Update, March 31, 2020
Devenir Link to more items from this source
July 6, 2020

"Total HSA assets held at credit unions totaled $1.86 billion as of 3/31/20, up 8% year-over-year.... There were 857 credit unions holding HSA assets as of 3/31/20 (16% of credit unions), up from 840 credit unions three years ago.... Devenir estimates the average HSA balance at a credit union is $2,632 as of 3/31/20, up from $2,513 at the end of 2019."

Tags: HSAs

How to Help Employees Build Health Savings
HealthEquity Link to more items from this source
July 2, 2020

"When establishing (or revising) an HSA-eligible health plan, employers need to carefully consider their HSA contribution strategy. They may choose to seed employees' HSAs, institute an employer match, combine the HSA with a wellness program or create a strategy that combines these approaches.... [P]lans with an employer match lead to 22 percent more employee participation and employee contributions that are 35 percent higher than plans without a match."

Tags: HSAs  •  Health Plan Design

New IRS Rule Has Pros and Cons for Direct Primary Care
MZQ Consulting, LLC Link to more items from this source
[Guidance Overview]
June 23, 2020

"[T]he rule could expand DPC's use by employers that offer HRAs as part of their group benefits arrangement. It explicitly allows employers to use HRA funds to reimburse employees for DPC fees as qualified medical expenses.... Unfortunately, the proposed rule would make it virtually impossible for the more than 21 million people with HDHP coverage and an HSA to engage in DPC services. It also seems to rule out people using funds in an existing HSA to pay for DPC fees, even if they do not have HDHP coverage currently."

Tags: HRAs  •  HSAs  •  Health Plan Costs  •  Health Plan Design

Editor's Pick IRS Addresses Section 213 Medical Expense Deduction and Direct Primary Care Arrangements
Thomson Reuters Practical Law Link to more items from this source
[Guidance Overview]
June 10, 2020

"[A Direct Primary Care Arrangement [DPCA]) is a contract between an individual and a primary health care provider under which the provider agrees to furnish medical care for a set annual or periodic fee without billing a third party.... Under the proposed regulations, ... an HRA may reimburse DPCA fees.... For individuals in DPCAs, the type of coverage provided by the DPCA affects whether the individual is an eligible individual for purposes of the HSA rules under Code Section 223."

Tags: HRAs  •  HSAs  •  Health Plan Design

ECFC Letter to Congressional Representatives in Support of the Family Savings Flexibility Act (PDF)
Defined Contribution Institutional Investment Association [DCIIA] Link to more items from this source
[Opinion]
June 10, 2020

"Because of the COVID-19 pandemic, employees may not have incurred the health care and dependent care expenses that they anticipated when they elected to have their compensation reduced and contributed to a health FSA or DCAFSA. By allowing the rollover of these amounts into the following plan year, these employees will not face the potential forfeiture of those amounts. [The Family Savings Flexibility Act (HR 7008)] also recognizes the fact that the current contribution limit for DCAFSAs of $5,000 -- set 20 years ago -- has not kept up with inflation by increasing the contribution limit."

Tags: Cafeteria Plans  •  Coronavirus (COVID-19)  •  Dependent Care  •  HRAs  •  HSAs  •  Health Plan Design

IRS Provides Welcome Deadline Relief for Savings Arrangement Reporting, Limited Additional Extensions
Ascensus Link to more items from this source
[Guidance Overview]
June 4, 2020

"Deadlines for providing [information returns for IRAs, health savings accounts (HSAs), Archer medical savings accounts (MSAs), and Coverdell education savings accounts (ESAs)] to the IRS and to account owners had previously been extended ... through July 15, 2020 ... The deadline for annual contributions to these accounts was also extended to July 15, 2020. This presented custodial organizations and service providers to these accounts with the dilemma of reporting contributions that could be received as late as the deadline for their reporting. Notice 2020-35 now provides a six-week window after the July 15, 2020, contribution deadlines in which organizations can prepare and provide these information returns to the IRS and to account owners."

Tags: Coronavirus (COVID-19)  •  HSAs  •  IRAs  •  Medical Savings Accounts (MSAs)

COVID-19: IRA and HSA Providers Have Until August 31 to File Form 5498 for 2019
Morgan Lewis Link to more items from this source
[Guidance Overview]
June 3, 2020

"The IRS recently issued new guidance in Notice 2020-35 that further extends the July 15, 2020 deadline until August 31, 2020 for IRA trustees, custodians, and issuers to file Form 5498 (IRA Contribution Information) for 2019 with the IRS and provide a copy to IRA owners and beneficiaries. This extension also applies to Form 5498-ESA (Coverdell Contribution Information) and Form 5498-SA (HSA, Archer MSA, or Medicare Advantage MSA Information). The Notice further explains that the penalty for failure to file Form 5498 will not begin to accrue until September 1, 2020."

Tags: Coronavirus (COVID-19)  •  HSAs  •  IRAs  •  Medical Savings Accounts (MSAs)

IRS Offers Relief to Cafeteria Plans, HDHPs, Individual-Coverage HRAs (PDF)
Mercer Link to more items from this source
[Guidance Overview]
May 29, 2020

"Employers adopting any of the pandemic relief's options should be mindful of the nondiscrimination rules for cafeteria plans and watch for unintended compliance failures that could result.... To reduce the possibility of adverse selection, employers may decide to limit the election changes allowed or not to offer any of new options under the relief. Any limitations, however, need to comply with the [HIPAA] rules that prohibit discriminating on the basis of health status."

Tags: Cafeteria Plans  •  Coronavirus (COVID-19)  •  Dependent Care  •  HRAs  •  HSAs

Text of IRS Notice 2020-35: Relief with Respect to Deadlines Applicable to Employment Taxes, Employee Benefits, and Exempt Organizations Affected by the Ongoing Coronavirus Disease 2019 Pandemic (PDF)
Internal Revenue Service [IRS] Link to more items from this source
[Official Guidance]
May 29, 2020

"[T]he revised deadline for an Affected Taxpayer to perform a Time-Sensitive Action ... is July 15, 2020, unless a different revised deadline is specified ...

"The Time-Sensitive Actions [include] ...

  • Application for a funding waiver under section 412(c) for a defined benefit pension plan that is not a multiemployer plan....
  • With respect to a multiemployer defined benefit pension plan, actions due to be performed on or before the dates described in: 
    • Section 432(b)(3) for the certification of funded status and the notice to interested parties of that certification.
    • Sections 432(c)(1) and 432(e)(1) for the adoption of, and the notification to the bargaining parties of the schedules under, a funding improvement plan or rehabilitation plan.
    • Sections 432(c)(6) and 432(e)(3) for the annual update of a funding improvement plan and its contribution schedules, or rehabilitation plan and its contribution schedules, and the filing of those updates with the Form 5500 annual return....
  •     Filing of Form 5330 and payment of the associated excise taxes....
  • With respect to the remedial amendment period and plan amendment rules for section 403(b) plans described in Rev. Proc. 2017-18 and Rev. Proc. 2019-39, actions that are otherwise required to be performed on or before March 31, 2020, with respect to form defects or plan amendments. The deadline for those actions is postponed to June 30, 2020 ...
  • With respect to pre-approved defined benefit plans, the deadline for the following actions is postponed until July 31, 2020:
    • Adoption of a pre-approved defined benefit plan that was approved based on the 2012 Cumulative List; 
    • Submission of a determination letter application under the second six-year remedial amendment cycle; and
    • Actions that are otherwise required to be performed with respect to disqualifying provisions during the remedial amendment period that would otherwise end on April 30, 2020....
  • With respect to a compliance statement issued under VCP, implementation of all corrective actions, including adoption of corrective amendments, required by the compliance statement....
  • Request for approval of a substitute mortality table in accordance with section 430(h)(3)(C)....
  • With respect to the Form 5498, IRA Contribution Information, Form 5498-ESA, Coverdell ESA Contribution Information, and the Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, the due date for filing and furnishing the forms is postponed to August 31, 2020."

Tags: 403(b) Plans and Annuities  •  Coronavirus (COVID-19)  •  HSAs  •  Health Plan Administration  •  IRAs  •  Medical Savings Accounts (MSAs)  •  Reporting to Government Agencies  •  Retirement Plan Administration  •  Retirement Plan Amendments

Summary of Recent Legislative and Regulatory Changes Impacting Group Health Plans
Slevin & Hart, P.C. Link to more items from this source
[Guidance Overview]
May 28, 2020

"Mandated coverage for COVID-19 testing and related items and services.... Mandated coverage for COVID-19 preventive services.... Communication of COVID-19 coverage changes.... Employee assistance programs (EAPs) and COVID-19 testing.... High deductible health plans (HDHPs) and spending accounts.... DOL update to model COBRA notices."

Tags: COBRA  •  Coronavirus (COVID-19)  •  HSAs  •  Health Plan Design

New Guidance Provides Flexibility for Cafeteria Plan Participants to Make Health Plan Elections Mid-Year
Morris, Manning & Martin, LLP Link to more items from this source
[Guidance Overview]
May 28, 2020

"An employer is not required to provide unlimited election changes but may determine the extent to which such election changes are permitted and applied at its discretion, provided that any permitted election changes are applied on a prospective basis only, and the changes to the plan's election requirements satisfy nondiscrimination rules applicable to Cafeteria Plans. This relief may be applied retroactively to periods prior to the issuance of the notice and on or after January 1, 2020."

Tags: Cafeteria Plans  •  Coronavirus (COVID-19)  •  Dependent Care  •  HSAs  •  Health Plan Design

IRS Issues Relief for FSAs and Other Cafeteria Plans
HealthEquity Link to more items from this source
[Guidance Overview]
May 28, 2020

"Employers considering amending their plans in line with the guidance should consider their unique circumstances and all possible outcomes. To get started, think the through the following: [1] The potential for adverse selection.... [2] How HSA use may be impacted.... [3] Budget capacity.... [4] Administrative capacity."

Tags: Cafeteria Plans  •  Coronavirus (COVID-19)  •  Dependent Care  •  HSAs  •  Health Plan Design

Reopening Health Plan Elections Mid-Year? IRS Leaves It Up to Employers
Littler Link to more items from this source
[Guidance Overview]
May 26, 2020

"[E]mployers have complete discretion to design and implement the allowed changes, or not allow any changes at all.... [E]mployers should consider ... [1] The direct financial cost of allowing employees to drop or add coverage, especially if healthy employees drop plan coverage and employees with high-cost claims remain on the plan. [2] Any applicable minimum participation requirements, if the plan is fully-insured. [3] The additional administration in reviewing and processing the election changes."

Tags: Cafeteria Plans  •  Coronavirus (COVID-19)  •  HSAs  •  Health Plan Design

IRS Releases 2021 Inflation Adjusted Amounts for HSAs
ABD Insurance & Financial Services Link to more items from this source
[Guidance Overview]
May 22, 2020

"The 2021 HSA contribution limit for individual coverage will increase by $50 to $3,600. The 2021 HSA contribution limit for family coverage will increase by $100 to $7,200.... [Rev. Proc. 2020-32] also includes the 2021 calendar year minimum deductible and out-of-pocket maximums allowed for a plan to qualify as a high deductible health plan (HDHP) -- the required coverage for an individual to be eligible to make or receive HSA contributions."

Tags: HSAs  •  Health Plan Costs  •  Health Plan Design

Text of IRS Rev. Proc. 2020-32: 2021 Inflation-Adjusted Amounts for Health Savings Accounts (HSAs) (PDF)
Internal Revenue Service [IRS] Link to more items from this source
[Official Guidance]
May 21, 2020

"For calendar year 2021, the annual limitation on deductions under Section 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,600. For calendar year 2021, the annual limitation on deductions under Section 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $7,200.... For calendar year 2021, a 'high deductible health plan' is defined under Section 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage, and the annual out-of-pocket expenses ... do not exceed $7,000 for self-only coverage or $14,000 for family coverage."

Tags: HSAs


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