Everything You Need to Know About Health Savings Accounts

Everything You Need to Know About Health Savings Accounts (HSAs)



If you have questions about health savings accounts, we have answers:


1. What is an HSA?

A health savings account (HSA) is a tax-advantaged account established to pay the current and future qualifying medical expenses of the account holder, the account holder’s spouse and all of the account holder’s tax dependents. With money from this account, you pay for healthcare expenses that are not covered by the account holder’s HSA eligible health plan.


2. Am I eligible to have an HSA?

To put money into a health savings account, you are required to have an HSA eligible health plan— sometimes referred to as a consumer-directed health plan (CDHP) or high-deductible health plan (HDHP)—in effect on the first day of the month.  Additionally, you are not permitted to have any other health coverage that reimburses non-preventative products and services below the deductible, and you cannot be enrolled in Medicare or be claimed as a tax dependent on someone else’s tax return.


3. What is a high-deductible health plan (HDHP)?

An HDHP is simply health insurance that meets certain minimum deductible and maximum out-of-pocket expense requirements set forth by the IRS.


4. What are the benefits of having an HSA?

Health savings accounts in many ways offer something for everyone, offering you a way to gain some financial security today and in the future. As triple tax-advantaged accounts, health savings account contributions can be deducted pretax from your paycheck, lowering your taxable income; any interest or investment gains on the money is tax free; and withdrawals from an HSA are tax free, as long as the money is spent on qualified medical expenses.


5. What qualifies as IRS-qualified medical expenses?

HSA funds may be used tax-free when paying for qualified medical expenses as described in section 213(d) of the Internal Revenue Service Tax Code.  A list of these expenses can be found on the IRS website at in publication 502 – Medical and Dental Expenses.


6. Can I take money out of my HSA for non-medical expenses?

Yes, but if you withdraw money to pay for something other than a qualified medical expense, you will have to include that distribution as other income when filing taxes and pay an additional tax of 20 percent penalty on the amount used for a non-qualified expense.


7. Do HSA funds rollover?

Yes, any unused funds are yours to retain in the health savings account and accumulate toward future healthcare expenses. Your HSA is portable, meaning that you can take it with you if you change employers and into retirement where funds may be used for non-qualified medical expenses without being subject to the 20 percent penalty.


8. What’s my HSA contribution limit?

The IRS provides inflation-adjusted health savings account contribution limits each year. For 2018, if you’re covered by an individual HSA eligible health plan, sometimes referred to as a consumer-directed health plan (CDHP) or high-deductible health plan (HDHP), the IRS allows you to put as much as $3,450 into your health savings account (HSA). If you’re contributing to an HSA and on a family CDHP, the maximum amount that you can contribute is $6,900.


If you’re 55 or older, you can contribute an extra $1,000 annually for a total of $4,450 or $7,900 for account holders on a family plan—with catch-up contributions accepted at any time during the year in which you turn 55. These HSA contribution limits are new for 2018 and just slightly higher than in 2017—$50 more for self-only coverage and $150 more for those on a family plan.


Need help determining how much you should set aside in your HSA each month to reach your retirement savings goal? WEX Health provides a free HSA Goal Calculator that you can use to determine the right amount for you.


9. Are HSAs used to pay for current medical expenses or to save for retirement?

Either or both. Because healthcare costs during retirement can be daunting, HSAs have become a favorite way to put money away for future medical bills while lowering taxable income. One oft-cited estimate from Fidelity: A 65-year-old couple retiring in 2017 can expect to spend an average of $275,000 on medical expenses throughout retirement. This is up from $260,000 in 2016, so one can only imagine how staggering this figure will become for those retiring a few decades from now.


10. What’s this I hear about investing my HSA dollars?

An health savings account is an excellent savings vehicle for healthcare costs during retirement, but few people have discovered that they can maximize their account’s long-term savings potential by investing their contributions in stocks, mutual funds and other investment vehicles. Studies show that HSA holders who take advantage of investments often have substantially higher account balances. Devenir reports that the average balance of an HSA investment account is six times larger than a non-investment holder’s average HSA balance. Over time, the savings advantage continues to multiply: The Employee Benefit Research Institute found that HSA investment accounts opened in 2005 had an end-of-year balance in 2016 that averaged $31,239 compared to average balances of $7,233 in accounts without investments.


11. What does WEX Health have to do with HSAs?

Through our WEX Health Cloud platform and our vast network of partners, WEX Health is currently powering more health savings accounts than any other HSA platform in the country.


We provide a variety of user-friendly tools to HR professionals, benefits leaders and consumers that empower them to find ways to save money and control healthcare costs with HSAs and other consumer-directed healthcare accounts.


For consumers: With the WEX Health Cloud Consumer Portal, Mobile App and WEX Health Payment Card, consumers have the ease of paying for their out-of-pocket healthcare expenses in a quick and efficient manner. Not only can they use the app to check available balances, view HSA transaction details, make contributions and take distributions, but also they can now conveniently log in using Touch ID. Consumers can also simply swipe their WEX Health Payment Card, and the funds are automatically deducted from their HSA for payment.


For employers/HR pros/benefits leaders: WEX Health Cloud was designed to make things easier for employers, not harder. With our WEX Health Cloud Employer Portal and Employer Dashboard, employers and benefits professionals can gain access to an overview of employees’ healthcare spending and saving habits. As of November 2017, the dashboard also includes an innovative new method for assessing an employee base’s ability to pay for out-of-pocket expenses through the Health Financial Viability Index. This data is a key indicator of employees’ financial health and helps employers gain visibility into how their employees are spending their HSA dollars, so they can select plans that best fit their needs. The new HSA Advance functionality gives employers the option to offer employees the ability to “borrow” from their future HSA contributions while providing flexibility in employer management of the program.


Today’s workers and employers are utilizing HSAs more than ever. We tell you why on

What You Need to Know About Data Security and Wearable Devices in the Workplace

What You Need to Know About Data Security and Wearable Devices in the Workplace



Now that wearables and smart technology devices are frequently used to incentivize and measure participation in workplace wellness programs, activity trackers have emerged as an important—and sometimes debated—link between employee and employer.


Concerns about personal data and activity trackers made the news (again) this week, with reports that U.S. soldiers may have inadvertently revealed the locations of remote military bases in Iraq, Afghanistan and Syria by publicly sharing their jogging routes via the Strava fitness app.


And during a series of meetings last year between Apple and Aetna, Aetna employees’ questions about the safety of the data on their employer-provided Apple Watches ended up dominating the discussion—and the news media’s coverage of that discussion. By way of background, Aetna partnered with Apple in 2016 to provide select large employers and individual customers with Apple Watches, as well as offering to reimburse all 50,000 of its own employees for the watches. Apple has stressed that health information is only shared with user consent, and Aetna is continuing to gather feedback from its employees about whether or not the watches have had an impact on their nutrition and exercise habits.


Of the Apple/Aetna meetings, CNBC reported, “One of the biggest concerns with companies like Apple and Fitbit collecting health information, like steps and heart rate, is that it could get into the wrong hands. These fears are amplified as technology companies strike deals with self-insured employers and health plans.”


So what are employers and health insurers doing with the data they collect from activity trackers? The large majority of those employers are doing nothing with it and are providing employees and/or their customers with wearable devices only to encourage health and wellness in hopes of increased productivity and engagement and decreased healthcare costs.


Though it’s now common across industries, the trend of doling out activity trackers to employees and customers was popularized by healthcare companies. Back in 2014, tech startup Oscar made headlines when it partnered with Misfit, a wearable device company, to link its customers’ biometric information straight to their health insurance, presenting Amazon gift cards to those who met their fitness goals.


Since 2016, UnitedHealthcare has awarded employees who meet fitness goals (as measured by their wearable devices) with monetary prizes and credits that can be applied to a health savings account or health reimbursement account. The company’s vice president of emerging products recently reported that its program, which it calls “Motion F.I.T.”, has yielded “very impressive” engagement and activity rates. And, as part of its Wellvolution program, Blue Shield of California leverages the Walkadoo app, which keeps track of activity and allows employee participants to earn awards such as Fitbits and Visa gift cards. It has since also invited some of its plan participants to engage with the app in exchange for awards. OptimaHealth, Cigna, Humana and other insurers additionally offer their members discounts and rewards tied to activity trackers.


Even as activity trackers have provided impetus for some corporate employees to prioritize their health, the practice of incentivizing with them has, in some ways, heightened the tension between personalized medicine and private information. Workplace wellness programs that are offered by group health plans to group health plan participants only are covered by Health Insurance Portability and Accountability Act (HIPAA) privacy and security rules, while wellness programs offered to all employees, however, are likely not covered by HIPAA.


Just last week we reported on a new ruling from a federal district court in Washington, D.C., in which the U.S. Equal Employment Opportunity Commission (EEOC) has been ordered to alter its rules on employer-sponsored wellness programs that financially penalize employees who refuse to provide personal medical and genetic information. As wearable healthcare technology grows more sophisticated, we suspect that the number of questions it raises will continue to grow, as will the opportunities it creates.


For more on the role of smartphones and apps in personal health management, read our blog about trends in remote health monitoring.

By the Numbers: The Latest in Mobile Payments Data

By the Numbers: The Latest in Mobile Payments Data



By most accounts, consumer adoption of the mobile payments trend has increased steadily, as consumers grow to understand its value and their concerns about security are assuaged. While some analysts say that B2B and retail can be expected to embrace mobile payments in the greatest numbers in the years to come, companies across industries, including healthcare, have used 2017 to explore emerging mobile payments opportunities, capabilities and challenges.


Some recent stats on mobile payments:


  • 83 percent: Percentage of U.S. consumers who owned a smartphone in June 2017 as compared to 79 percent in October 2016 (JPMorgan)


  • 360.4 million: Number of mobile payments users in 2017; this is expected to nearly double by 2021 to 663.8 million users (Statista)


  • $622.75: How much the average mobile payments user will have spent on mobile payments in 2017; this is expected to grow to $1,303.85 by 2021 (Statista)


  • 41 percent: Percentage of consumers who are likely to try digital wallets in the next year (JPMorgan)


  • 64 percent: Percentage of consumers who plan to use a mobile wallet in 2020 (Accenture)


  • 61 percent: Percentage of consumers who welcome open access to their finances so they can see checking account or credit card balances when paying with any mobile app (Accenture)


  • 25 percent: Percentage of U.S. retailers that currently have terminals that accept mobile payments. Apple Pay and PayPal are retailers’ two most widely accepted digital payment methods, though Android Pay is gaining in popularity with retailers and can be expected to overtake Masterpass by Mastercard within the next 12 months. (Statista)


  • 83 percent: Percentage of healthcare providers who plan to meet the rise in patient consumerism with more retail-like technology solutions and practices (Black Book)


  • 62 percent: Percentage of medical bills that were paid online in the first half of 2017 (Black Book)


  • 95 percent: Percentage of consumers who would pay online if a healthcare provider’s website had the option (Black Book)


  • 71 percent: Percentage of patients who say that mobile pay and billing alerts have improved their actual satisfaction with a healthcare provider (Black Book)


Mobile payments are likely to be critical to the future of healthcare benefits, as deductibles and out-of-pocket maximum costs rise, resulting in millions of dollars of unpaid medical bills. Through the WEX Health Cloud platform, members can streamline the funding, purchasing and payment processes required for informed healthcare financial decision making.

Want more? Read why consumers are turning to their smartphones for health information.

The 3 Biggest Threats to Data Security and Privacy in Healthcare Today

The 3 Biggest Threats to Data Security and Privacy in Healthcare Today


by Jesse Braasch & Jason Langston


According to a new report on healthcare data breaches in 2017, the three greatest threats to data security and privacy this year have been human error, hacking/malware and insiders. To prevent breaches, all industry players need to ask themselves if they are vulnerable to these threats and ensure that their software systems are updated.


  1. Unintended Disclosure: 41 percent (the large majority) of breaches are the result of unintended disclosure, a.k.a. user mistake or human error. These incidents can come in the form of emails inadvertently sent to the wrong recipient or emails that contain protected health information (PHI). Discharge instructions may be given to the wrong patient, or a server containing PHI can be accidentally left open to the public. Workforce training and education can go a long way to diminish incidents of unintended disclosure.


  1. Hacking or Malware: Hackers have continued to disproportionately target healthcare organizations in 2017, organizing significant and sophisticated attacks that account for 15 percent of breaches so far this year. Phishing attacks on hospitals, insurance providers, medical equipment suppliers and others have resulted in the leaking of tens of millions of patient names, social security numbers, medical records, diagnoses, treatment information and other clinical data.


  1. Insiders: Disproving the old-fashioned theory that the best way to protect data is to keep it close to home are continuing reports of employee snooping or physical theft of on-site devices and data, which account for 15 percent of breaches (physical loss can be blamed for another 8 percent). Typically this can involve an employee viewing records without a work-related reason. Of note, the number of breaches attributed to employees are on the rise, but they are generally easier to mitigate than external threats.


Though the healthcare industry was slower to adopt cloud computing than other industries, but most healthcare providers and employers now overwhelming believe that patient and employee benefits data is safer being managed by a software-as-a-service (SaaS) company than it is with on-premise software. SaaS platforms are also more likely to have data engineers and software experts dedicated to continuously monitoring and guarding accounts for the above threats.


How can a company know if a SaaS provider can be trusted to provide secure custody of data? Verify that they understand the regulatory requirements and are strictly compliant with HIPAA, SSAE 16 and PCI.



Jesse Braasch

Vice President of Infrastructure and Operations at WEX Health

Jesse Braasch is the Vice President of Infrastructure and Operations at WEX Health, the largest Software as a Service (SaaS) company in the healthcare payment market today. His favorite saying is, “The most dangerous phrase in the English language is, ‘We’ve always done it this way!’” In the ever-changing, always dynamic world of consumer directed healthcare, Jesse’s dedication to innovation and excellence will continue to keep WEX Health at the forefront of the current healthcare revolution.

As the consumer driven healthcare industry grows exponentially, Jesse will help ensure WEX Health’s technical ecosystem has best-in-breed features, stability, security, and quality of service so the company is able to scale in parallel with the industry. Jesse’s passion is delivering creative yet rock solid technologies that truly solve the needs of the customer and enable speed to market.

Regarded as a veteran of the technology industry, Jesse has over twenty years of experience working for industry leading SaaS corporations and Fortune 500 companies. Most recently Jesse was Director of Infrastructure for XRS Corporation, a SaaS company providing trucking fleet management solutions, where he led server, storage, database, and IT operations teams. Prior to working at XRS, Jesse held technical and team leadership positions at Target Corporation, Fair Isaac Corporation, and Travelers Indemnity Company.

After serving in the United States Marine Corps, Jesse earned his Bachelor’s Degree in Information Technology from Capella University, and is currently pursuing his Masters of Science degree in Security. Jesse, his wife, and two teenage sons live in Maple Grove, MN, where he is an active volunteer in the community’s youth ice hockey association.

Jason Langston

Vice President of Infrastructure and Operations at WEX Health

Jason Langston leads the Enterprise Architecture and Application Security team at WEX Health. This team works closely with the IT Security, Compliance and Fraud teams to ensure the robust security and scalability of WEX Health Cloud. They run the software security assurance program, performing various tests, scans, attack models and reviews to identify, fix and prevent security issues. Jason has worked at WEX Health for 13 years and in the tech industry for almost 20 years in various technical and leadership roles, with a strong focus on architecture and security.

Consumers Are Searching for Health Info Via Smartphone

Consumers Are Searching for Health Info Via Smartphone—Meet Them There


All it takes is one look around a busy subway platform, café or concert to know that Americans are devoted to our smartphones: At any given time, it seems like most of us have one in hand –ready to help us follow a whim or tackle a task. Survey numbers corroborate this: Google found that 80 percent of Americans use a smartphone every day for an average of three hours a day, and while 67 percent use a computer daily, for one in four people a smartphone is the only device they use. This means that companies and healthcare providers that aren’t reaching their employees or customers on mobile are missing an opportunity to connect with a quarter of their audience. Continue reading

Technology Looking to Improve the Healthcare Recruitment Process

Technology Looking to Improve the Healthcare Recruitment Process

A new entrant into the healthcare marketplace looks to help address the shortage of physicians anticipated by 2025 – a 90,000 physician shortage to be exact, according the medical school and teaching associations.

Along with those numbers, the Bureau of Labor Statistics adds that healthcare practitioners and healthcare support positions are expected to be the fastest growing jobs from now until 2024. Registered nurses are on both lists, expected to be in shortage and among the fastest growing positions. Continue reading

Smartphones and Apps Growing in Use to Manage Personal Healthcare

There are many challenges facing the health industry today such as a growing and aging population, many of whom are staying in the workforce, decreasing health budgets, and a rise in chronic diseases. Health organizations are putting their resources in technology to provide a solution to these challenges.

This is a good thing as health plans and employers looking to help employees manage their personal healthcare are turning to smartphones and health apps for assistance.

Remote Health Monitoring

Recognizing that existing protocols between physicians and patients need to change, there is a movement underway opening the door for remote health monitoring. This is a brand-new protocol where a physician treats an individual by continuous, actionable information being collected from the patient and digitally delivered to the provider to create more meaningful engagement between the two.

At the center of this are smart technologies, like smart phones, watches, and plasters (which some look like band-aids) that can provide insights that will deliver benefits to impact the physical, emotional and mental aspects of a person. Smartphones, which approximately two-thirds of U.S. adults now own, according to a 2015 Pew research study, already have fingerprint sensors and a camera. They also have the ability to connect through Bluetooth to monitors, activity trackers and medical devices like ECG machines to deliver data where and when its needed.

New Technology Forms

Multiple sensors in the form of jewelry, fabric garments and adhesive patches or plasters will be delivered moving forward based on personal preference. These sensors can then transform a smartphone into a personal health management device.  Some health insurers have recognized the value in these offerings and are subsidizing the cost of Apple watches and Fitbits for enrollees.

Gathering important biometrics and communicating them on a daily basis with little or no recharging is imperative for this technology to evolve into the mainstream. Using a smartphone means it’s also critical to have sufficient security and privacy in place. Data will not only need to be validated, but also acted upon. Learning from this data can help improve the quality and delivery of care to individuals everywhere.

Source:  Electronic Design. The Future of Digital Health. Feb. 2017 PP 30-31.