Massachusetts Mutual Life Insurance Co. (MassMutual) is expanding its wealth accumulation and protection benefits at the workplace by making health savings accounts (HSAs) available on its MapMyFinances financial wellness tool.
The HSAs are powered by WEX Health Inc., enabling workers covered by high-deductible health care plans to put aside money on a tax-favored basis for eligible health care expenses during their working years as well as retirement. According to MassMutual, contributions to the account may be made by the employee, the employer or both, and the account is owned by the employee.
Survey data shows business owners are interested in speaking with advisers about health savings accounts (HSAs). That is driven by the fact that 55% of business owners think health care is the biggest expense for retirees, followed by housing (24%), food (6%) and transportation (1%). However, only 20% of business owners say they fully understand how HSAs work. Many business owners did not know that HSAs must be paired with high-deductible health plans, for example. Many also did not know that employers can contribute to an HSA and that the balances carry over year-to-year.
MassMutual cites other data from Aite Group showing usage of HSAs is projected to outpace other financial accounts for health care such as health reimbursement arrangements (HRAs) and flexible spending accounts (FSAs) by 2021. Notably, while HRAs and FSAs require eligible expenses to be validated by a third party, the IRS does not require such validation for HSAs. However, it is required that consumers keep all of their medical receipts for eligible expenses in the event of a tax audit.
Based on the data provided, MassMutual’s MapMyFinances tool analyzes the user’s personal financial needs and sets priorities accordingly. While health care coverage is typically a top priority for most people, other financial needs such as retirement savings; life, disability, accident and critical insurance coverage; college savings; debt reduction and others vary depending upon the person’s family situation and budget.