Participation in HSAs on the Rise

In "Fidelity® Reports 48 Percent Boost in Health Savings Account Openings in 2013", Fidelity indicated that:

"Fidelity Investments® recorded a 48 percent increase in the number of health savings accounts (HSA) opened in 2013 as more and more companies offer the tax-advantaged accounts together with high-deductible health plans (HDHP). Fidelity now administers HSAs for 269,000 account holders at more than 100 companies, with assets increasing 39 percent to $653 million from $471 million the year prior."

To read more, click here.

IRS Issues New HSA Limits for 2015

In Revenue Procedure 2014-30 , the Internal Revenue Service states that:

"For calendar year 2015, the annual limitation on deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,350. For calendar year 2015, the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $6,650...For calendar year 2015, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,300 for self-only coverage or $2,600 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,450 for self-only coverage or $12,900 for family coverage."

The Revenue Procedure is available here.

IRS issues memo on FSA carryovers and HSAs

The Internal Revenue Service's Office of Chief Counsel recently issued a memo "Health Flexible Spending Arrangement (health FSA) Carryovers and Eligibilty for a Health Savings Account (HSA)". The memo addresses the following issues:

"May an otherwise eligible individual under section 223(c)(1)(A) of the Internal Revenue Code (the Code) contribute to an HSA if the individual participates in a general purpose health FSA solely as the result of a carryover of unused amounts from the prior year?...

May an otherwise eligible individual under section 223(c)(1)(A) of the Code who participates in a general purpose health FSA solely as the result of a carryover of unused amounts from the prior year contribute to an HSA for any month after all of the carried over health FSA amounts are paid or reimbursed for medical expenses?"

To read more, click here.

Report finds high percentage of employer contributions in health accounts

In "Most Report Employer Contributions to Health Accounts", the Employee Benefit Research Institute (EBRI) reports that:

"Nearly three-quarters (71 percent) of workers with a health reimbursement arrangement (HRA) or health savings account (HSA) reported that their employers contributed to the account last year... the percentage of workers with an HRA or HSA plan whose employers contributed to the account has been steadily increasing since 2009, and in 2013 reached its highest level since the inception of the survey."

To read more, click here.

EBRI Explores Eligibility for Account-Based Health Plans

In "How Many Are Eligible for Account-Based Health Plans?", the Employee Benefit Research Institute (EBRI) finds:

"According to the 2013 EBRI/Greenwald & Associates Consumer Engagement in Health Care Survey (CEHCS), among individuals with traditional, employment-based health benefits and a choice of health
plans, 37 percent were eligible for a health reimbursement arrangement (HRA) or a health savings account (HSA)-based plan in 2013, about the same percentage as has been eligible for such plans since 2007.

The report notes that 11.8 million adults ages 21–64 (9.7 percent of the U.S. population) were enrolled in a plan with an HRA or HSA. An additional 9.3 million reported that they were in an HSA-eligible plan but had not opened such an account. Thus, overall, about 21 million adults ages 21–64 with private insurance, representing 17.3 percent of that market, were either in a CDHP or an HSA-eligible plan but had not opened the account."

To read more, click here.

Research examines contributions to HRAs and HSAs

 In "Employer and Worker Contributions to Health Reimbursement Arrangements and Health Savings Accounts, 2006–2013," the Employee Benefit Research Institute explains that:

"It was found that a significant percentage of workers with traditional health benefits were eligible for account-based health plans. Among individuals with traditional, employment-based health benefits and a choice of health plans, 37 percent were eligible for an HRA or an HSA-based plan in 2013, about the same percentage as has been eligible for such plans since 2007..."

To read more, click here.

Recent report examines HSA activity

In "Year-End 2013 Devenir HSA Research Report", Devenir Research finds that:

"HSA accounts exceed 10 million. HSA accounts rose to 10.7 million, holding assets totaling over $19.3 billion, a year over year increase of 25% for HSA assets and 30% for accounts for the period of December 31st, 2012 to December 31st, 2013."

They also report that "Direct employer relationships are the largest driver of new HSA accounts, accounting for 38% of all new HSA accounts in 2013."

To read more, click here.

Understanding the Recent Guidance on Same-Sex Spouses in Cafeteria Plans and HSAs

In "IRS guidance addresses same-sex spouse issues for cafeteria plans and HSAs", Buck Consultants explains that:

"The IRS has released guidance on the application of the Supreme Court’s Windsor decision to cafeteria plans, including health and dependent care flexible spending accounts, and to HSAs. Importantly, the contribution limits that apply to dependent care spending accounts and HSAs will apply on a combined basis for same-sex married couples. Employers may need to amend plan documents to reflect this new guidance, and should consider communicating to employees about the changes."

To read more, click here.

EBRI Finds Continued Growth in Consumer Driven Health Plans (CDHPs)

In "Findings from the 2013 EBRI/Greenwald & Associates Consumer Engagement in Health Care Survey", the Employee Benefit Research Institute reports that:

"The 2013 EBRI/Greenwald & Associates Consumer Engagement in Health Care Survey (CEHCS) finds continued slow growth in consumer-driven health plans (CDHPs): 9.7 percent of the population was enrolled in a CDHP, up from 9.6 percent in 2012, while enrollment in high-deductible health plans (HDHPs) increased from 16 percent in 2012 to 18 percent in 2013. Overall, 26.1 million individuals with private insurance, representing 15 percent of that market, were either in a CDHP, or in an HDHP that was eligible for a health savings account (HSA) but had not opened the account."

To read more, click here.

Buck Consultants Survey Finds Employees More Active in Managing Health after Enrolling in HSA

Employees who contribute to health savings accounts (HSAs) generally become more engaged in managing their health after enrolling, according to a recent survey conducted by Buck Consultants, A Xerox Company.

According to the findings, 51 percent of respondents set aside more money for potential medical costs than before they had HSAs, 29 percent have more discussions with their doctors about the cost of care and 13 percent more actively manage their chronic disease.

The survey is available here.

ERIC members and trial members can read more here.

IRS Issues Guidance on Same-Sex Spouses in Cafeteria Plans, FSAs, and HSAs

The IRS recently issued Notice 2014-1, titled "Cafeteria Plans, Flexible Spending Arrangements, and Health Savings Accounts – Elections and Reimbursements for Same-Sex Spouses Following the Windsor Supreme Court Decision". The Notice states that its purpose is:

"This notice provides guidance on the application of the rules under section 125 of the Internal Revenue Code (Code) (relating to cafeteria plans, including health and dependent care flexible spending arrangements (FSAs)), and section 223 of the Code (relating to health savings accounts (HSAs)), as those two provisions relate to the participation by same-sex spouses in certain employee benefit plans following the Supreme Court decision in United States v. Windsor, 570 U.S. ___, 133 S. Ct. 2675 (2013), and the issuance of Rev. Rul. 2013-17, 2013-38 I.R.B. 201. This notice amplifies the previous guidance provided in Rev. Rul. 2013-17."

The notice is available here.

Towers Watson Explains the Impact of the ACA on HRAs, FSAs and Other Health Accounts

In "Applying PPACA Market Reforms to HRAs, FSAs and Other Health Accounts", Towers Watson explains that:

"New guidance prohibits employers from using individual accounts, such as health reimbursement accounts (HRAs) and flexible spending accounts (FSAs), to reimburse employees for premiums they buy in a public or private exchange. Under the guidance, however, employers may use certain “integrated” HRAs to reimburse retirees tax-free for individual policy premiums."

To read more, click here.

CRS Compares Types of Health Accounts

Congressional Research Service (CRS) explains "Tax-Advantaged Accounts for Health Care Expenses: Side-by-Side Comparison, 2013". The report states:

"Four types of tax-advantaged accounts can be used to pay for unreimbursed qualifying medical expenses: health care flexible spending accounts (FSAs), health reimbursement accounts (HRAs), health savings accounts (HSAs), and medical savings accounts (MSAs). Qualifying unreimbursed medical expenses are defined in the Internal Revenue Code (IRC) and typically include deductibles, copayments, and goods and/or services not covered by insurance. The goods and/or services can include medical services rendered by physicians, surgeons, dentists, and other medical practitioners. The costs of equipment, supplies, diagnostic devices, and prescription drugs are also qualifying medical expenses."

To read the full report, click here.