/General/General%2013.png?width=1280&height=853&name=General%2013.png)
Healthcare Provider Update: Healthcare Provider Information for Aetna Aetna, part of the CVS Health family, has been a key player in the Affordable Care Act (ACA) marketplace, providing health insurance plans to individuals and families. However, significant changes are on the horizon for 2026, as Aetna will exit the ACA marketplace in 17 states, impacting approximately 1 million members. This withdrawal is attributed to the company's challenges in maintaining competitiveness and providing value in a rapidly evolving healthcare landscape. Potential Healthcare Cost Increases in 2026 As the healthcare landscape shifts, substantial premium hikes are anticipated for those enrolled in ACA marketplace plans, with projections of up to 75% increases in out-of-pocket costs due to the potential loss of enhanced federal subsidies. In some states, insurers have filed for rate increases exceeding 60%, driven by surging medical costs and the expiration of premium tax credits established under the American Rescue Plan. For Aetna's former members, this change further complicates their healthcare landscape as they seek new insurance options amid heightened financial pressures. Click here to learn more
'Aetna employees looking to maximize their Retirement Savings should take full advantage of the unique triple tax advantage of Health Savings Accounts (HSAs),'' said Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement Group.
The higher HSA contribution limits for 2024 offer a tax-free way for Aetna employees to fund medical expenses in retirement, ''says Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement Group.
In this article, we will discuss:
1. HSA Contribution Increases for 2024: Individual and family limits changed.
2. Triple Tax Advantage of HSAs: HSAs beat 401(k)s in tax savings.
3. HSA Benefits for Retirement: Long-term healthcare using HSAs.
The IRS just announced good news for A.O. Smith employees looking to grow their retirement accounts. From 2024 onwards, maximum contributions for Health Savings Accounts (HSAs) will increase sharply. People will be able to contribute USD 4,150 and families USD 8,300 a year. The new limits are an enormous jump from the previous year's USD 3,850 for individuals and USD 7,750 for families. And anyone over 55 can contribute another USD 1,000 as a catch-up contribution, for a combined maximum of USD 5,150 and USD 10,300 for couples. This development gives A.O. Smith employees another way to build up retirement savings with HSAs.
For longtime savers, those adjustments are important because an HSA could outshine more traditional retirement savings vehicles like 401(k)s and individual retirement accounts (IRAs). Financial coach and author Blake Hilgemann says, 'Every dollar in an HSA is worth at least 17.65% more than a dollar in a 401(k).' The arithmetic behind that claim is in the tax advantages HSAs provide. And unlike many other tax-advantaged retirement accounts, HSAs allow contributions and investment earnings to be tax-free if the withdrawals comply with account rules.
The tax advantages of HSAs outweigh traditional 401(k)s and IRAs, which pay a tax deduction on contributions before withdrawals during retirement. And early withdrawals before 59 1/2 add another 10% penalty. In contrast, HSAs offer a triple-tax advantage. Contributions are tax deductible, investments grow tax free inside the account, and qualified medical expenses can be withdrawn tax free.
Now you understand why Hilgemann emphasizes savings of 'at least' 17.65% with an HSA, since individuals in higher tax brackets can save much more by avoiding income tax. Today, earners above USD 578,125 are subject to the highest marginal federal income tax rate of 37%.
To use an HSA as a retirement savings vehicle, people must be enrolled in a high-deductible health plan (HDHP) with USD 1,500 for self-only coverage or USD 3,000 for family coverage. Like flexible spending accounts (FSAs), HSAs allow pre-tax contributions from paychecks to fund healthcare costs. But unlike FSAs, HSAs lack a 'use it or lose it' provision and are therefore more nimble and able to accommodate different life stages.
A key component of an HSA besides the triple-tax savings is its flexibility throughout a person's life. At some point in life, 'Every American is going to be a spender or a saver for healthcare needs,' says Kevin Robertson, senior vice president and chief revenue officer of HSA Bank. This adaptability enables individuals to build strong tax-free retirement savings. It takes getting used to paying for healthcare out of pocket until you hit the deductible each year, but the long haul is worthwhile.
A.O. Smith employees with short-term healthcare costs can use HSAs to build tax-free retirement savings. Notably, the funds are tax-free if used for qualified medical expenses. Since medical bills likely will remain in retirement, HSAs provide a separate source for those expenses. A 65-year-old retired couple would need about USD 315,000 to cover healthcare in retirement by 2022, according to Fidelity.
And remember that medical expenses need not accompany withdrawals. Keeping digital copies of medical expense receipts over the years lets people withdraw funds tax-free in the future. For example, if you have 20 years of medical expenses saved and want to take a big vacation in retirement, you can take USD 15,000 out of your HSA and use the saved receipts to make the withdrawal tax-free.
Such reimbursement is simple and does not involve long bureaucratic processes or expense submissions. Kevin Robertson says, 'It's all self-substantiated. So it's between you and the IRS so long as you have receipts to support your claims if you get audited.'
In summary, rising maximum HSA contributions offer an excellent opportunity for A.O. Smith employees to take full advantage of their retirement savings. The triple-tax advantage HSAs provide may help them outperform traditional retirement accounts. Enrolled in a high-deductible health plan, people can take advantage of HSAs' flexibility throughout life. With short-term healthcare costs managed, individuals build tax-free retirement savings and allocate funds to cover medical costs. Withdrawals are tax-free and saved receipts can be used later, making HSAs appealing to long-term savers. Consider the huge benefits and potential savings HSAs can offer as retirement nears.
Financial coach Blake Hilgemann says an HSA is at least 17% better than a 401(k) because it offers different tax advantages. But new research from the Investment Company Institute (ICI) adds another compelling factor: Higher healthcare costs in retirement. Age increases healthcare costs, and retirees aged 65 and over pay far more than younger people for healthcare, according to the ICI's study published in May 2023. This finding supports the use of HSAs as retirement savings — a dedicated tax-free source to help pay for these rising healthcare costs later in life.
A high-powered engine in an HSA will crank out your retirement savings, and a 401(k) is a reliable car. Just picture it this way: A dollar you spend on an HSA is worth at least 17.65% more than a turbocharger. It means the dollar is equivalent to USD 1.18 in a 401(k). You get triple tax advantages with an HSA — just like you get in a top sports car with great acceleration, handling, and efficiency. You get tax-deductible contributions, tax-free investment growth, and tax-free withdrawals for qualified medical expenses. Also — why take a regular ride when you can take an HSA on your way to a comfortable retirement?
Featured Video
Articles you may find interesting:
- Corporate Employees: 8 Factors When Choosing a Mutual Fund
- Use of Escrow Accounts: Divorce
- Medicare Open Enrollment for Corporate Employees: Cost Changes in 2024!
- Stages of Retirement for Corporate Employees
- 7 Things to Consider Before Leaving Your Company
- How Are Workers Impacted by Inflation & Rising Interest Rates?
- Lump-Sum vs Annuity and Rising Interest Rates
- Internal Revenue Code Section 409A (Governing Nonqualified Deferred Compensation Plans)
- Corporate Employees: Do NOT Believe These 6 Retirement Myths!
- 401K, Social Security, Pension – How to Maximize Your Options
- Have You Looked at Your 401(k) Plan Recently?
- 11 Questions You Should Ask Yourself When Planning for Retirement
- Worst Month of Layoffs In Over a Year!
- Corporate Employees: 8 Factors When Choosing a Mutual Fund
- Use of Escrow Accounts: Divorce
- Medicare Open Enrollment for Corporate Employees: Cost Changes in 2024!
- Stages of Retirement for Corporate Employees
- 7 Things to Consider Before Leaving Your Company
- How Are Workers Impacted by Inflation & Rising Interest Rates?
- Lump-Sum vs Annuity and Rising Interest Rates
- Internal Revenue Code Section 409A (Governing Nonqualified Deferred Compensation Plans)
- Corporate Employees: Do NOT Believe These 6 Retirement Myths!
- 401K, Social Security, Pension – How to Maximize Your Options
- Have You Looked at Your 401(k) Plan Recently?
- 11 Questions You Should Ask Yourself When Planning for Retirement
- Worst Month of Layoffs In Over a Year!
Sources:
1. Internal Revenue Service. 'Health Savings Account (HSA) Contribution Limits for 2024.' IRS, 2024, https://www.irs.gov/app/vita/content/00/00_10_005.jsp?level=a&utm_source=chatgpt.com . Accessed 25 Feb. 2025.
2. SmartAsset. 'HSA vs. 401(k): What's the Difference?' SmartAsset, Dec. 2024, https://smartasset.com/retirement/hsa-vs-401k-2?utm_source=chatgpt.com . Accessed 25 Feb. 2025.
3. Fidelity Investments. 'HSA Contribution Limits 2024 and 2025.' Fidelity Investments, 2024, https://www.fidelity.com/learning-center/smart-money/hsa-contribution-limits?utm_source=chatgpt.com . Accessed 25 Feb. 2025.
4. HealthEquity. 'HSA Contribution Limits 2024.' HealthEquity, 2024, https://healthequity.com/hsa-contribution-limits?utm_source=chatgpt.com . Accessed 25 Feb. 2025.
5. Investopedia. 'Investing in Your HSA vs. Your 401(k).' Investopedia, 2022, https://www.investopedia.com/investing-in-hsa-vs-401k-5272337?utm_source=chatgpt.com . Accessed 25 Feb. 2025.
How does Aetna Inc.'s frozen pension plan affect employees' eligibility for benefits, and what specific criteria must current employees meet to qualify for any benefits from the Retirement Plan for Employees of Aetna Inc.?
Eligibility for Benefits: Aetna Inc.'s pension plan has been frozen since January 1, 2011, meaning no new pension credits are accruing. Employees who were participants before this date remain eligible for benefits but cannot accrue additional pension credits. To qualify for benefits, participants need to have been vested, which generally occurs after three years of service(PensionSPD).
In what ways can employees at Aetna Inc. transition their pension benefits if they leave the company, and what implications does this have for their tax liabilities and retirement planning?
Transitioning Pension Benefits: If employees leave Aetna, they can opt for a lump-sum distribution or an annuity. Employees can roll over their lump-sum payments into an IRA or other tax-qualified plans to avoid immediate taxes. However, direct rollovers must follow the tax-qualified plan's rules. If not rolled over, employees are subject to immediate tax and potential penalties(PensionSPD).
What steps should an Aetna Inc. employee take if they become disabled and wish to continue receiving pension benefits, and how does the company's policy on disability impact their future retirement options?
Disability and Pension Benefits: Employees who become totally disabled and qualify for long-term disability can continue participating in the pension plan until their disability benefits cease or employment is terminated. No additional pension benefits accrue after December 31, 2010, but participation continues under the plan until employment formally ends(PensionSPD).
Can you explain the implications of the plan amendment rights that Aetna Inc. retains, particularly concerning any potential changes in the pension benefits and what this could mean for employee planning?
Plan Amendment Rights: Aetna reserves the right to amend or terminate the pension plan at any time. If the plan is terminated, participants will still receive benefits accrued up to the date of termination, protected by ERISA. Any future changes could impact employees' planning and retirement options(PensionSPD).
How does the IRS's annual contribution limits for pension plans in 2024 interact with the provisions of the Retirement Plan for Employees of Aetna Inc., and what considerations should employees keep in mind when planning their retirement contributions?
IRS Contribution Limits: The IRS sets annual contribution limits for pension plans, including defined benefit plans. In 2024, employees should ensure that their pension contributions and tax planning strategies align with these limits and the provisions of Aetna's pension plan(PensionSPD).
What are the options available to Aetna Inc. employees regarding pension benefit withdrawal, and how can they strategically choose between a lump-sum distribution versus an annuity option?
Withdrawal Options: Aetna employees can choose between a lump-sum distribution or various annuity options when withdrawing pension benefits. The lump-sum option allows for immediate access to funds, while annuities provide monthly payments over time, offering a more stable income stream(PensionSPD).
How does Aetna Inc. ensure compliance with ERISA regulations concerning the rights of employees in the retirement plan, and what resources are available for employees to understand their rights and claims procedures?
ERISA Compliance: Aetna complies with ERISA regulations, ensuring employees' rights are protected. Resources are available through the Plan Administrator and myHR, providing information on claims procedures, plan rights, and how to file appeals if necessary(PensionSPD).
What documentation should employees of Aetna Inc. be aware of when applying for their pension benefits, and how can they ensure that they maximize their benefits based on their years of service?
Documentation for Benefits: Employees should retain service records and review their benefit statements to ensure they receive the maximum pension benefits. They can request additional documents and assistance through myHR to verify their years of service and other relevant criteria(PensionSPD).
How do changes in interest rates throughout the years affect the annuity payments that employees at Aetna Inc. might receive upon retirement, and what strategies can they consider to optimize their retirement income?
Impact of Interest Rates on Annuities: Interest rates significantly affect annuity payments. Higher interest rates increase the monthly annuity amount. Employees should consider the timing of their retirement, especially at the end of the year, when interest rates for the following year are announced(PensionSPD).
If employees want to learn more about their pension options or have inquiries regarding the Retirement Plan for Employees of Aetna Inc., what are the best channels to contact the company, and what specific resources does Aetna provide for assistance?
Contact for Pension Inquiries: Employees can contact myHR at 1-888-MY-HR-CVS (1-888-694-7287), selecting the pension menu option for assistance. Aetna also provides detailed resources through the myHR website, helping employees understand their pension options and benefits(PensionSPD).
-2.png?width=300&height=200&name=office-builing-main-lobby%20(52)-2.png)
.webp?width=300&height=200&name=office-builing-main-lobby%20(27).webp)
-2.png)
.webp)