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Page 18 Sa nir Sa a y Senior Seni by Jim Miller How a Health Savings Account Can Boost Your Retirement Savings Dear Savvy Senior, I’m interested in contributing to a health savings account to help boost my retirement savings but would like to better understand how they work. What can you tell me? Almost 60 Dear Almost, A health savings account, or HSA, is a fantastic fi nancial tool that can help you build up a tax-free stash of money for medical expenses now and after you retire. But to qualify, you must be enrolled in a high-deductible health insurance plan. Here’s an overview of how they work and how you can open one. HSA Rules HSAs have become very popular over the past few years as the cost of health care continues to skyrocket, and because more and more Americans have high-deductible health plans. The great benefi t of a HSA is the triple tax advantage that it off ers: Your HSA contributions can be deducted pretax from your paycheck, lowering your taxable income; the money in the account grows tax-free; and if you use the money for eligible medical expenses, withdrawals are tax-free. And if you change jobs, the HSA moves with you. To qualify, you must have a health insurance policy with a deductible of at least $1,500 for an individual or $3,000 for a family in 2023. In 2024, the deductible rises to $1,600/individual or $3,200/family. This year, you can contribute up to $3,850 if you have single health insurance coverage, or up to $7,750 for family coverage. Next year (2024) you can contribute significantly more – up to $4,150 for single coverage or up to $8,300 for family coverage. And people age 55 and older can put away an extra $1,000 each year. But you cannot make contributions after you sign up for Medicare. The money can be used for out-of-pocket medical expenses, including deductibles, co-payments, Medicare premiums, prescription drugs, vision and dental care and other expenses (see IRS.gov/ pub/irs-pdf/p502.pdf, page 5, for a complete list) either now or when you retire for yourself and your spouse as well as your tax dependents. Unlike a fl exible spending account, an HSA doesn’t require you to use the money by the end of the year. Rather, HSA funds roll over year to year and continue to grow tax-free in your HSA account for later use. In fact, you’ll get a bigger tax benefit if you use other cash for current medical expenses and keep the HSA money growing for the long term. Be sure to hold on to your receipts for medical expenses after you open your HSA, even if you pay those bills with cash, so you can claim the expenses later. There’s no time limit for withdrawing the money tax-free for eligible medical expenses you incurred any time after you opened the account. But be aware that if you do use your HSA funds for non-medical expenses, you’ll be required to pay taxes on the withdrawal, plus a 20 percent penalty. The penalty, however, is waived for those 65 and older, but you’ll still pay ordinary income tax on withdraws not used for eligible expenses. How to Open an HSA You should fi rst check with your employer to see if they off er a HSA, and if they will contribute to it. If not, you can open an HSA through many banks, brokerage firms and other financial institutions, as long as you have a qualified high-deductible health insurance policy. f you plan to keep the money growing for the future, look for an HSA administrator that offers a portfolio of mutual funds for long-term investing and has low fees. Some of the top-rated HSA providers in 2023 are Lively, HealthEquity, OptumBank, Fidelity, HSA Bank and Bank of America. After setting up your HSA plan, adding money is pretty straightforward. Most plans let you do online transfers from your bank, send checks directly, or set up a payroll deduction if off ered by your employer. To access your HSA funds many plans, provide a debit card and most allow for reimbursement. Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org. Jim Miller is a contributor to the NBC Today show and author of “The Savvy Senior” book. nior ior THE EVERETT ADVOCATE – FRiDAy, DECEmbER 1, 2023 FUNDING | FROM PAGE 6 for potential cost increases by exploring ways to mitigate the cost or negotiating improved prices. In addition, advance notifi cation will enable the HPC to focus on these cost drivers at their Cost Trends Hearings, which are held each year to examine the drivers of health care costs; identify challenges and opportunities for improving care and reducing costs in Massachusetts; increase transparency and accountability for health care providers and insurers; and help the state to meet its annual health care cost growth benchmark. This bill also empowers the Center for Health Information and Analysis (CHIA), an independent state agency that provides objective analysis of the quality, affordability, utilization and access to the Massachusetts health care system, to collect a range of drug cost information from pharmaceutical manufacturers and pharmacy benefit managers to include in its annual health care cost report. Collecting this data will allow policymakers and consumers to better understand the role of pharmaceutical manufacturers in driving health care costs. Pharmacy Benefit Manager (PBM) oversight To address another potential cost driver, the bill brings oversight to PBMs, which play a major role in determining how prescription drugs are tiered and priced on inEXPERTS | FROM PAGE 12 hiking and walking miles upon miles with her senior beagle. “I became involved with the Mystic River Watershed Association (MyRWA) a couple of years ago, after volunteering at the annual Mystic River Herring and Paddle, plus running and paddling the race almost every year since 2015. I felt inspired by all the hard work that surance plans. PBMs serve as middlemen between prescription drug buyers and sellers and currently operate with little oversight, making it unclear if they act in the best interest of consumers or health plans when they negotiate the price of drugs with pharmaceutical manufacturers. The PACT Act 3.0 authorizes the Division of Insurance to provide much-needed oversight by licensing and regulating PBMs – and establishing sanctions for PBMs that fail to meet certain standards. Additionally, pharmaceutical manufacturers and PBMs will be included in the HPC’s annual Cost Trends Hearings for the fi rst time. By participating in the hearings process, pharmaceutical manufacturers and PBMs will be required to provide public testimony on the factors that infl uence drug costs and provide documentation to back up their claims. HPC will use this information to analyze how pharmaceutical industry costs impact the state’s health care market – and the ultimate cost of health care for Massachusetts residents. The bill has gained support from leading advocates for healthcare access. In a statement, the Health Equity Compact praised the legislation, saying, “The Health Equity Compact commends the Senate for including provisions to address the increasing cost burden of certain medications for chronic conditions in An Act Relative to Pharmaceutical Access, Costs and Transparency. Providing aff ordable medications for diabetes, asththe MyRWA does to keep our waterways clean and accessible to underrepresented communities, and learned about the programs that they provide to enrich the lives of the communities, educational programs for youth, and overall, fostering a healthy and vibrant environment for the watershed. Just from reading their newsletter, you know MyRWA does a lot! As a board member, I hope I can ma, and heart conditions is an important step toward addressing health inequities, and these provisions are also included in the health equity omnibus bill which would pave the way for the next chapter of health reform. We thank the Senate President and Senator Friedman for their work to address health disparities in the Commonwealth and look forward to continued partnership with our legislative colleagues.” “The cost of prescription drugs has risen rapidly, putting critical medications out of reach for many,” said Health Care For All Executive Director Amy Rosenthal. “This legislation will ensure thousands of residents are able to better afford the necessary medications to manage their diabetes, asthma and heart conditions, and bring transparency and accountability to the drug industry through the state’s cost trends process.” During the bill’s debate, the Senate adopted several amendments, including an amendment to ensure that safety net hospitals and federally qualified community health centers can purchase discounted drugs from drug manufacturers through the federal 340B program. This program helps to keep costs low for patients who are served by hospitals in vulnerable communities. One amendment directs a study on whether the state should adopt a statewide policy requiring schools, police stations and fi re stations to maintain a supply of epinephrine injectors on hand. contribute to spread awareness of MyRWA’s mission, and represent the organization well in any capacity.” Kelly Ryan (she/her), CPA is a Vice President at J.P. Morgan. She has over 15 years of experience working in various aspects of the fund services industry. Recently she received a Certifi cate in Environmental, EXPERTS | SEE PAGE 19

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