HSA Headlines - 5/24/19 - How far are you from your deductible relief day?
Managing a health savings account (HSA) means playing the long game to bolster your readiness for retirement, but with yearly contribution limits and additional tax considerations, HSAs also keep you grounded in your finances today.
But, as much as we focus on what you should do to prepare for life's big milestones, each year HSAs have their own little "events" that you should be mindful of to help you save even more money on your health care expenses. This week, we take a look at both short- and long-term HSA events and how you can come out of both with the best financial plan moving forward.
May 19: Deductible Relief Day - Scott Wooldridge, BenefitsPro
Have you reached your deductible limit for 2019? While deductibles vary greatly from plan to plan, for 2019, the minimum deductible limit for self-only high deductible health plan (HDHP) coverage is $1,350 and $2,700 for families. The Kaiser Family Foundation (KFF) has named May 19, "Deductible Relief Day," which coincides with the time that most average HDHP users meet their yearly deductible and insurance takes over payment of their health care expenses.
While this is certainly a great occasion for HDHP users, KFF created this initiative to highlight rising out-of-pocket expenses that Americans face each year. And the problem is worsening; KFF estimates that in 2006, deductibles were so low that most were exhausted by February 28. High deductibles are making a major impact on working professionals, but if you've met yours, take some time to celebrate.
Near retirement and have an HSA? Beware of snags when claiming Social Security - Lee Conrad, Financial Planning
On the opposite end of the HSA spectrum is pre-retirement planning, and the issues that can arise when you decide to collect Social Security. As we know, you can begin withdrawing HSA funds for non-medical expenses without a tax penalty starting at age 65, and you can continue contributing to your HSA as long as you're enrolled in an HDHP. But once you enroll in Medicare or start collecting Social Security, things can get interesting.
Here's the deal: if you decide to collect on our Social Security, you are automatically enrolled in Medicare Parts A and B. While you can opt out of Part B, you're still stuck with Part A, which disqualifies you from continuing to contribute to an HSA. While this may not affect those who are cruising toward a well-funded retirement, but it could be very difficult for those who are forced to retire early and will have to push their savings even further for longer.
There are a number of pieces of legislation in Congress that could make Social Security and Medicare more beneficial for HSA users and retirement planners, including the "Retirement Security and Savings Act" currently before the House. While major changes may be coming in the future, those nearing retirement should certainly investigate how Social Security and Medicare decisions can affect their future finances.
HSA Headlines is a weekly roundup of the latest, most relevant news and conversations about your health savings. It appears every Friday, exclusively on the HSA Learning Center. And for more about your physical and financial well-being, be sure to follow us on Facebook and Twitter.