DRAPER, Utah--(BUSINESS WIRE)--HealthEquity, Inc. (NASDAQ: HQY), the nation’s largest independent health savings account (HSA) non-bank custodian, participated in drafting legislation announced today that along with a new IRS notice, will expand the benefits of HSAs and help millions of Americans pay for expenses in retirement.
The Health Savings for Seniors Act, a bi-partisan bill introduced in the United States House of Representatives today by Rep. Ami Bera (D-CA) and Rep. Jason Smith (R-MO), would allow more than 57 million Americans currently enrolled in Medicare to open and contribute to an HSA—without any changes to Medicare coverage. For the growing number of working seniors, this bill would protect their health and retirement security by providing increased access to affordable healthcare.
For the average household led by someone 65 or older earning about $48,000 per year, this bill could save a retired couple $1,800 per year1. Over the entirety of the average Medicare recipient’s retirement, this bill could save them more than $40,0002 in income taxes.
The introduction of this bill follows an announcement on Wednesday, July 17, 2019, from the Internal Revenue Service (Notice 2019-45), which adds certain specific drugs and devices for treatment of a range of chronic conditions, including diabetes, asthma, depression, and heart and liver disease, to the list of preventive benefits that may immediately be provided by an HSA-compatible or high deductible health plan. While an HSA-compatible plan generally means the enrollee is responsible for paying for all medical expenses before the deductible is met, preventive care services—defined as care received to prevent illnesses or diseases—covered by the enrollee’s health plan are permitted in an HSA-compatible plan, the idea being that prevention is less expensive than treatment. This announcement significantly benefits HSA-compatible plan enrollees who suffer from chronic conditions by saving them potentially hundreds or thousands of dollars each year.
“The introduction of the Health Savings for Seniors Act and the new IRS notice represent two of the most important developments for health savings accounts since their creation in 2003,” said HealthEquity founder and vice chairman Steve Neeleman, MD, who lobbied for the passage of the legislation that created HSAs. “HealthEquity has been advocating for HSAs as the solution to America’s healthcare problems since our inception. We are proactively working with employers to provide their employees with the best options possible to pay for healthcare.”
HealthEquity connects health and wealth, delivering health savings account (HSA) and other consumer driven health and retirement solutions in partnership with over 45,000 employers and 141 health, retirement and other benefit plan providers nationwide. HealthEquity members have access to its end-to-end platform and remarkable “purple” service to become consumers of healthcare while building health and retirement savings for tomorrow. HealthEquity is the custodian of $8.3 billion in assets for 4.1 million HSA members nationwide. For more information, visit www.HealthEquity.com.
1Assumes maximum annual HSA contribution is made each year and used for qualified medical expenses.
2Assumes 12% federal income tax and 8% state income tax for combined 20% marginal tax rate. HSA contribution max is $9,000 ($4,500 x 2 people) for 2019, with assumed $100 per year annual contribution limit increase over a 20-year retirement duration multiplied by 20%.