Making Cents: Managing your HSA after 'Big Beautiful Bill' passes

ALL RIGHT. THANKS SO MUCH. ALL RIGHT. SO ONE ASPECT OF THE BIG BEAUTIFUL BILL THAT WAS PASSED LAST WEEK WAS TO EXPAND ACCESS AND FLEXIBILITY FOR HEALTH SAVINGS ACCOUNTS. SO STARTING IN 2026, MILLIONS OF AMERICANS WILL BECOME ELIGIBLE FOR THOSE ACCOUNTS. JOINING US THIS MORNING TO BREAK DOWN THE CHANGES AND TELL US WHAT WE SHOULD BE AWARE OF. VICE PRESIDENT, FINANCIAL ADVISOR WITH US, CATHERINE MCCALL, THANK YOU SO MUCH FOR JOINING US. SO, OKAY, FOR THOSE WHO MAY NOT BE FAMILIAR, WHAT IS AN HSA? AN HSA IS A HEALTH SAVINGS ACCOUNT. SO THAT’S A MEDICAL SAVINGS ACCOUNT, BASICALLY ALLOWING YOU TO DEFER MONEY FROM YOUR PAYCHECK PRETAX BASIS FOR THOSE MEDICAL EXPENSES. I LIKE TO THINK OF IT AS THE EMERGENCY FUND FOR YOUR MEDICAL COSTS. THAT COULD BE UNFORESEEN, RIGHT? AND SO AGAIN, VERY BENEFICIAL, ESPECIALLY IF YOU HAVE IT. BUT THERE COULD ALSO END UP BEING SOME DRAWBACKS TO USING THIS AS WELL. YEAH, ABSOLUTELY. SO THIS YEAR YOU CAN PUT $8,550 IF YOU’RE A FAMILY, $4,300 IF YOU’RE AN INDIVIDUAL, AND AN EXTRA 1000 IF YOU’RE AGE 55 AND OLDER. OKAY, THAT’S A GREAT NUMBER OF DOLLARS THAT YOU CAN BE PUTTING IN. AND IF YOU DO THAT EVERY SINGLE YEAR, AND IF YOU A LOT OF PEOPLE USED TO TREAT IT LIKE AN IRA, LIKE YOU’RE JUST ADDING MONEY TO THAT ACCOUNT, YOU’RE INVESTING IT, YOU’RE GROWING IT. THE DRAWBACK TO THAT IS THAT IF YOU TREAT IT LIKE AN IRA AND YOU DON’T TOUCH THAT MONEY, WHICH IS BOTH A GOOD AND A BAD THING, YOU DIE WITH IT AND IT BECOMES 100% TAXABLE INCOME TO YOUR FAMILY MEMBER. IF IT DOESN’T GO TO YOUR SPOUSE. SO IF YOU PASS IT ON TO YOUR KID AND YOU’VE GOT $80,000 IN THERE, THAT’S 100% ORDINARY INCOME FOR THEM. AND A LOT OF PEOPLE DON’T REALIZE THAT THAT BECOMES MAYBE MORE OF A BURDEN THAN A THAN A BENEFIT. RIGHT? ABSOLUTELY. SO ALMOST YOU KIND OF WANT TO USE IT BEFORE YOU GET TAXED. EXACTLY. LOSE IT. BUT YOU KNOW WHAT I’M SAYING. EXACTLY. SO ANY NEW CHANGES BECAUSE OF THIS NEW BILL. YEAH. SO ONE OF THE BIG BENEFITS WELL, TWO BIG BENEFITS I WOULD SAY. ONE IS THAT IT EXPANDED THE TYPES OF MEDICAL PLANS THAT MAKE YOU ELIGIBLE TO CONTRIBUTE. SO IT USED TO JUST BE HIGH DEDUCTIBLE PLANS. NOW IT’S BRONZE PLANS OR EVEN THE ACA COMPREHENSIVE MEDICAL PLANS ALLOW YOU TO ACTUALLY CONTRIBUTE TO THIS ACCOUNT. THE OTHER GOOD THING IS THAT THEY’VE MADE A LOT OF DIFFERENT ELIGIBLE EXPENSES, LIKE ABLE TO BE USED FOR REIMBURSEMENT. SO THEY’RE CALLING THEM MORE MEDICAL EXPENSES. THINGS LIKE YOUR LONG TERM CARE PREMIUM INSURANCE COSTS COULD BE USED FOR AN HSA USING THAT HSA CONTRIBUTION. THAT’S A REALLY NICE BENEFIT FOR SOMEONE WHO MIGHT BE RETIRED AND ALREADY PAYING FOR SOMETHING LIKE THAT. YEAH, AND JUST MAKING IT MORE EASY TO USE THAT MONEY. I, I DO HAVE AN HSA. I WANT TO CUT MY FINGER, REALIZE I DIDN’T HAVE LIKE A BAND AID OR ANYTHING, JUST WENT OVER TO THE DRUGSTORE. AND YOU CAN USE YOUR HSA TO GO AHEAD AND JUST BUY THOSE BAND-AIDS IF YOU NEED THEM. RIGHT? SO, I MEAN, THERE’S A LOT OF BENEFITS. YEAH. IF YOU’RE A SENIOR AND YOU AND YOU DECIDE TO MAKE A HOME IMPROVEMENT AND ADD BARS TO YOUR SHOWER, STUFF LIKE THAT BECOMES A MEDICAL EXPENSE THAT COULD BE USED. RAMPS AT YOUR HOUSE ARE NOW CONSIDERED A MEDICAL EXPENSE. THE OTHER THING THAT’S IMPORTANT TO REALIZE IS THAT IF YOU IF YOU DON’T HAVE AN HSA BUT YOU’RE ELIGIBLE TO DO ONE AND YOU HAVE A MASSIVE MEDICAL COST IN A SINGLE YEAR, THEY ALLOW YOU TO DO A ONE TIME TRANSFER FROM YOUR IRA INTO THE HSA TO PULL THE MONEY OUT PRETAX FOR THAT MEDICAL COST. SO YOU CAN ONLY DO IT ONCE IN YOUR WHOLE LIFETIME. BUT IF YOU HAVE SOMETHING REALLY CATASTROPHIC AND OUTLANDISH THAT YOU’RE NOT READY FOR SURE AND YOU HAVE MONEY IN AN IRA, YOU CAN ACTUALLY GET IT INTO THAT HSA AND TAKE IT OUT PRETAX. SO THAT’S JUST SOMETHING. IT’S A LOOPHOLE THAT IS IMPORTANT FOR PEOPLE TO KNOW ABOUT. VERY COOL. WELL, CATHERINE, THANK YOU SO MU