Retirement Planology is pleased to announce that our Chief Planologist, Courtenay Shipley, has earned the Certified Health Savings Adviser (CHSA) designation, after successfully completing the designation course and exam. This means that Retirement Planology is able to work alongside companies that are offering Health Savings Accounts to employees through their current, or future health insurance plans, and also select and monitor investments related to these accounts as a fiduciary.
A Health Savings Account (HSA) is a type of savings account that lets an employee set aside money on a pre-tax basis to pay for qualified medical expenses. By using untaxed dollars in an HSA to pay for deductibles, copayments, coinsurance, and other covered expenses, an employee can lower their overall health care costs. To qualify for a Health Savings Account, employees need to be enrolled in a high deductible health insurance plan, which is a plan that for 2018, has a deductible of $1,350 or more for an individual plan (or "self-only coverage," to use IRS lingo) and $2,700 or more for a family plan. Also, an HDHP's out-of-pocket maximum can't be more than $6,650 for an individual plan and $13,300 for a family plan.
Basically, the way a Health Savings Account works is that employees are given a debit card that's tied to a flex line spending account (or they can submit receipts with a claim), where they can access the money that they've put into the HSA for health costs and use these funds to pay for health-related expenses, such as:
o Health insurance plan deductibles, copayments and coinsurance
o Prescription drugs
o Dental services including braces, bridges and crowns
o Vision care including glasses and Lasik eye surgery
o Psychiatric and certain psychological treatments
o Long-term care services
o Medically related transportation and lodging
o Certain health premiums, including COBRA
Employers can contribute to the HSA on behalf of their employees, helping employees accumulate money to offset the higher deductible.
The interesting thing about HSAs is that they are not a "use it or lose it" type of account. Any unused balance stays in the account and you can keep accumulating more dollars in the HSA. Money inside the HSA can also be invested, provided the HSA offers that capability. The result is that someone in the right scenario can set aside pre-tax dollars, keep them invested, and use them tax-free for health expenses in retirement.
While that might sound simple enough, as with anything related to health insurance, it's complicated. There are a lot of options and different types of plans associated with this and contingencies related to secondary insurance coverage and existing savings plans. For example, guiding employees on how much to invest each paycheck can be dependent on how much they go to the doctor, and even how much you're contributing to the account as an employer.
Finding the right provider and investment mix is where Retirement Planology has always brought value to our clients and it's no different with this service addition. We partner with your health insurance broker on communication strategy for employees, and also act as a fiduciary in advising on the investments available in the HSA. For more information, contact us to schedule a consultation.