One of the most discussed topics at this year’s National Association of Plan Advisors (NAPA) Summit in Las Vegas was Health Savings Accounts (HSA’s). This comes as no surprise as the HSA has emerged as a bit of a catchall for plan participants.
Under the current ACA (Obamacare) rules, HSA’s provide an ideal hedge against high deductible plans and under new rules being contemplated under the Trump Administration, HSA’s are likely to be out in front as a major component of a healthcare reform bill.
Aside from the benefits HSA’s provide in either case, they are “good medicine”. Health Savings accounts grow tax-deferred, have favorable tax treatment on withdrawal and are completely fungible.
It also follows suit that two major names (as reported by Investment News), recordkeeper Empower Retirement and the largest recordkeeper, Fidelity Investments made news with regard to HSA’s. Empower has announced that it has partnered with Optum, a health-plan administrator, to offer HSAs to the retirement provider’s clients beginning this summer. Empower’s customers will be able to manage their HSA and retirement accounts on a single portal and receive professional advisory services on the Health Savings Account.
Fidelity already offered HSA services to its clients, however, only to those plans with more than 2,000 participants. According to Investment News, Fidelity will begin offering these services to companies of 50 employees or more, signaling a significant shift in the importance of incorporating healthcare into the mix.
It is likely that Health Savings Accounts will continue to capture the attention of participants and recordkeepers simply because it is one of the most obvious bright spots in tax deferred savings plans. It’s the right cure at the right time. If you are a sponsor, you can bet that HSA will become a significant part of your vocabulary in the next 12-18 months.
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