New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Big Tax Breaks for Health Savings Accounts Get Even Better for Abbott Laboratories Employees

Healthcare Provider Update: Healthcare Provider for Abbott Laboratories: Abbott Laboratories operates as both a developer and provider of various healthcare products and services, focusing on medical devices, diagnostics, nutrition, and pharmaceuticals. Its health care offerings span from advanced medical devices for chronic disease management to diagnostic equipment and nutritional products aimed at enhancing patient care and outcomes. Potential Healthcare Cost Increases in 2026: As we look towards 2026, healthcare costs are anticipated to surge significantly, primarily driven by the expiration of enhanced federal premium subsidies under the Affordable Care Act (ACA). States may implement record-setting premium hikes, with some rates soaring over 60%. Combined with underlying medical cost inflation and aggressive rate increases from major insurers, consumers could face an alarming rise in out-of-pocket costs-potentially over 75% for many policyholders. This scenario underscores the pressing need for individuals to strategically prepare for the financial landscape in the coming years. Click here to learn more

'With recent tax rule changes, Abbott Laboratories employees now have expanded opportunities to optimize their health care savings through health savings accounts (HSAs), which provide tax-free growth, tax-free withdrawals for medical expenses, and enhanced flexibility, making them an essential tool for retirement planning.' — Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

'Recent changes to health savings accounts (HSAs) offer Abbott Laboratories employees valuable opportunities to not only save for medical expenses but also to take advantage of tax-free growth and withdrawals, making HSAs an indispensable tool for securing long-term health care savings.' — Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

How health savings accounts (HSAs) work and their tax advantages.
Recent tax changes that expand the benefits of HSAs for Abbott Laboratories employees.
The flexibility and unique features of HSAs, including contributions, withdrawals, and new eligible uses like fitness-related expenses.

For many years, individuals looking to combine health insurance with significant tax benefits have found health savings accounts (HSAs) compelling options. Over 60 million Americans currently use HSAs ¹ to take advantage of tax benefits and save for medical costs. The proposed tax and spending bill, approved by the House of Representatives in May 2025, could further enhance the benefits of these accounts. These changes, expected to be approved by the Senate in June, might expand the availability of HSAs to an additional 20 million Americans, marking the largest expansion since the program's creation in 2004.

Abbott Laboratories employees, especially retirees and older workers, will greatly benefit from this HSA expansion. The new amendments aim to simplify the regulations, clarify unclear clauses, and allow previously prohibited uses, such as paying for gym memberships. These improvements could offer greater flexibility and provide an excellent opportunity to save money for long-term health care, making a significant impact for those nearing retirement or already retired.

How Health Savings Accounts Work

To qualify for an HSA, individuals must have a high-deductible health insurance plan, which typically requires the policyholder to pay a larger share of medical expenses up front compared to standard health insurance. When combined with an HSA, the individual or employer can make tax-deductible contributions to offset these higher costs. The HSA allows for tax-free investments and growth, as well as tax-free withdrawals for approved medical expenses.

The maximum tax-deductible contribution to an HSA for 2025 is $4,300 for individuals and $8,550 for family coverage. In addition, a $1,000 'catch-up' contribution is available for individuals aged 55 and older. This presents a prime opportunity for Abbott Laboratories employees approaching retirement to increase their health care savings. HSA adoption is expected to grow significantly, with total assets expected to reach $147 billion by the end of 2024, up from $30 billion in 2015. ²

The triple tax benefits of HSAs distinguish them from other retirement savings accounts like 401ks and IRAs. Contributions to an HSA lower taxable income, funds grow tax-free, and withdrawals for approved medical expenses are tax-free. In contrast, withdrawals from 401ks and IRAs are taxable as income.

The Recent Modifications and Their Effects

Ten significant modifications in the new tax law will benefit individuals who use HSAs, particularly older Americans. Currently, Medicare beneficiaries enrolled in Medicare Part A at age 65 are restricted from contributing to an HSA. The new proposal allows these individuals to continue contributing to their HSA if they retain their employer health insurance. This change could be especially beneficial for Abbott Laboratories employees who choose to remain on the company health plan rather than enrolling in Medicare.

Additionally, the new bill will make certain Affordable Care Act (ACA) plans, such as Bronze and Catastrophic policies, eligible for HSA benefits. This will benefit both younger employees who opt for catastrophic coverage under the ACA and older employees who retire before age 65 and use ACA plans until they become eligible for Medicare.

One of the most anticipated changes is the ability to use HSA funds for fitness-related expenses, such as gym memberships. Currently, HSA funds cannot be used for fitness-related activities, but the new law would allow tax-free withdrawals for these costs, with annual limits of $500 for individuals and $1,000 for families. This change encourages employees to focus on preventative health care, potentially reducing long-term medical expenses.

Other Advantages and Characteristics of HSAs

HSAs offer significant flexibility compared to other retirement savings accounts. Withdrawals can be taken years after the expenses are incurred, as long as proper documentation is available. This makes HSAs a great option for employees looking to save for future health care costs without needing to use the funds immediately. Additionally, after age 65, individuals can withdraw HSA funds for non-medical expenses, although these withdrawals are taxable as income.

Abbott Laboratories employees will also benefit from the option to make family contributions to HSAs. Children under the age of 26 who are covered by their parents' health insurance may make contributions to their own HSA, even if they are no longer dependents. This allows families to provide long-term support for medical expenses, helping to build a more comprehensive health care savings plan for future generations.

In Conclusion

For Abbott Laboratories employees looking to save for health care expenses in retirement, HSAs offer a flexible and tax-efficient way to do so. The recent legislative changes, including expanded eligibility and enhanced benefits, will make it easier for more employees to take full advantage of these accounts. With higher contribution limits, the ability to use HSA funds for fitness-related costs, and continued tax-free growth, HSAs present a powerful tool for retirement savings.

By adopting these changes, Abbott Laboratories employees can optimize their health care savings and prepare for medical expenses in retirement. Whether through increased contribution limits, expanded eligibility, or greater flexibility in how funds can be used, these modifications offer new opportunities for employees to plan for their future health care needs.

The proposed changes also include the option for spouses to contribute to a shared HSA, beginning in 2026. This is a major benefit for older couples planning for retirement, as it allows them to pool their resources and take full advantage of the catch-up contributions. With these new rules, Abbott Laboratories employees can further streamline their health care savings strategy, preparing for both immediate and long-term needs.

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Sources:

1. The Wall Street Journal, 29 May 2025, pp. A1–A2. https://www.wsj.com/personal-finance/taxes/hsa-2025-changes-6d6314eb

2. Devenir, 2 April 2025. https://www.devenir.com/devenir-report-shows-hsa-assets-reach-nearly-147-billion-by-year-end-2024/

Other resources:

1. U.S. Department of the Treasury, Jan. 2025, pp. 1–15. https://www.irs.gov/publications/p969

2. HealthEquity, Nov. 2024, pp. 1–10. https://www.healthequity.com/library/hsas-medicare-and-retirement-savings

4. Fidelity Investments, 2025, pp. 1–5. https://www.fidelity.com/viewpoints/wealth-management/hsas-and-your-retirement

5. The Motley Fool, 1 Nov. 2023, pp. 1–3. https://www.fool.com/retirement/2023/11/01/4-surprising-hsa-benefits-that-all-retirees-should/

How does the Abbott Laboratories Annuity Retirement Plan (ARP) determine the eligibility requirements for employees, and how can potential changes in federal regulations impact these requirements? Employees of Abbott Laboratories may need to understand the nuances of eligibility, particularly regarding age and service criteria. Changes in laws governing retirement benefits could pose questions about continued eligibility and could affect when employees can begin pension payments.

Eligibility Requirements & Impact of Federal Regulations: Employees at Abbott Laboratories become eligible for the ARP by being part of a participating division, being at least 21 years old, and residing in the U.S. (with certain exceptions for U.S. employees abroad). Changes in federal regulations could potentially alter these eligibility criteria, especially since such rules often influence age and service requirements for retirement plans. Any changes in legislation regarding retirement benefits might necessitate adjustments in eligibility rules, affecting when employees can begin receiving pension payments.

Can you explain the significance of Vesting Service in the context of the Abbott Laboratories Annuity Retirement Plan? Employees often wonder how their years of service influence their benefit eligibility and the amount they can expect. Understanding the elements that constitute Vesting Service, and the implications of terminating employment before achieving vesting, is crucial for Abbott Laboratories employees planning for retirement.

Significance of Vesting Service: Vesting Service at Abbott Laboratories refers to the time an employee must accumulate to gain entitlement to pension benefits, irrespective of continued employment. This service is critical as it determines the security of an employee's future benefits and the degree of an employee's investment in the company's pension plan. Employees who terminate employment prior to achieving full vesting lose entitlement to accrued pension benefits, making understanding and accruing Vesting Service essential for long-term financial planning.

In what ways does the calculation of Final Average Pay play a role in determining retirement benefits under the Abbott Laboratories Annuity Retirement Plan? The methodology used to calculate an employee's Final Average Pay can significantly impact the retirement income they receive. Employees at Abbott Laboratories should consider how their earnings history and the inclusion or exclusion of certain payments factor into their anticipated benefits.

Role of Final Average Pay in Benefit Calculation: Final Average Pay (FAP) is crucial in determining the pension benefits under the ARP as it represents the average of an employee’s highest earnings over a specified period. Abbott’s ARP calculates pension based on a percentage of the FAP, multiplied by years of eligible service. This calculation means that higher earnings towards the end of an employee's career can significantly increase the pension benefits, incentivizing employees to maximize their earnings potential in their final working years.

What optional forms of payment are available to employees upon retirement under the Abbott Laboratories Annuity Retirement Plan, and how do these choices affect overall pension benefits? Abbott Laboratories employees need to evaluate whether to choose single or joint survivor annuities, among other options, as these decisions can have long-term financial implications for both themselves and their beneficiaries.

Optional Forms of Payment at Retirement: The ARP offers various payment options upon retirement, including single and joint survivor annuities, which affect the benefit's distribution and longevity. These choices impact financial planning for retirement, particularly in ensuring that a spouse or beneficiary may continue to receive benefits after the retiree's death. The selection between these options should align with personal financial needs and considerations for dependents' security.

Different employees may have varying perspectives on the importance of early retirement options offered by Abbott Laboratories. What are the qualifications for early special retirement, and how does this option affect retirement income? Employees contemplating retirement before the standard age should understand how factors such as age, years of service, and the specific provisions of the Abbott Laboratories Annuity Retirement Plan influence their benefits.

Early Retirement Qualifications and Impacts: Early retirement under the ARP is available to employees who meet specific age and service criteria, allowing them to retire with reduced benefits before reaching the normal retirement age. This option can significantly affect retirement income, depending on the number of years ahead of normal retirement age the employee chooses to retire, making it crucial for employees to understand the financial trade-offs involved in retiring early.

How does the Abbott Laboratories Annuity Retirement Plan ensure compliance with the Employee Retirement Income Security Act (ERISA), and what rights do employees have under this act? Abbott Laboratories employees should be informed about their rights regarding plan documentation, required disclosures, and recourse in the event of disputes pertaining to their retirement benefits.

ARP Compliance with ERISA: The ARP is designed to comply with the Employee Retirement Income Security Act (ERISA), providing employees with rights to information about plan features and funding, benefits accrual, and recourse in case of disputes. Compliance with ERISA ensures that employees' retirement benefits are protected under federal law, offering a framework for security and transparency in their retirement planning.

How do Abbott Laboratories employees who experience a medical leave of absence or disability maintain their retirement service credits under the Annuity Retirement Plan? Understanding the interaction between long-term disability benefits, medical leave, and retirement plan participation is essential for employees navigating health-related issues while planning for their retirement.

Impact of Medical Leave or Disability on Retirement Credits: Employees on medical leave or disability continue to accrue service credits under the ARP, ensuring that such periods do not adversely affect their pension benefits. This protection helps employees who are temporarily unable to work due to health issues maintain their trajectory towards earning full retirement benefits.

Given the potential for changes to the Abbott Laboratories Annuity Retirement Plan, how can employees stay informed about their rights and any modifications to the planâ€™s terms? Employees at Abbott Laboratories should have access to reliable communication channels, including how to receive updates about the retirement plan, which could impact their financial planning.

Staying Informed About Plan Changes: Employees can stay informed about changes to the ARP through regular communications from Abbott Laboratories, access to updated plan documents, and direct inquiries to the Abbott Benefits Center. Staying proactive in seeking information and understanding the implications of plan modifications is essential for effective retirement planning.

What processes should Abbott Laboratories employees follow if they wish to obtain a statement regarding their entitlement to a pension? Employees looking to plan for retirement need clear instructions on how to request this crucial information and understand its importance in their long-term financial strategy.

Obtaining a Pension Statement: Employees wishing to obtain a statement of their pension entitlements under the ARP should contact the Abbott Benefits Center. Clear instructions on how to request this information are crucial for employees to plan accurately for retirement and understand their accrued benefits.

If an employee at Abbott Laboratories has further questions about the Annuity Retirement Plan or requires clarification on the document contents, how can they effectively contact the appropriate department? Knowing how to reach out to Abbott Laboratories' Benefits Center regarding retirement plan inquiries is vital for all employees wanting to confirm their understanding or seek additional information about their retirement benefits.

Contacting the Appropriate Department for Plan Inquiries: For further inquiries or clarification regarding the ARP, employees should contact the Abbott Benefits Center. Knowing the correct contact information and how to reach out effectively is vital for resolving concerns and gaining a deeper understanding of their retirement benefits.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Abbott Laboratories offers an Employee Stock Purchase Plan (ESPP) that allows employees to purchase company stock at a discounted price through automatic payroll deductions. This plan operates in two periods: an "offering period" where payroll deductions accumulate, and a "purchase period" where those deductions are used to buy Abbott/AbbVie stock. The ESPP is a qualified plan, meaning contributions are made on a pre-tax basis, allowing for tax-deferred growth. Employees can benefit from lower taxes on gains if they hold the stock for at least one year and sell it at least two years after the offering date. This plan helps employees benefit from the company's performance while also providing tax savings. 401(k) Plan - Stock Retirement Plan (SRP) Abbott's 401(k) plan, known as the Stock Retirement Plan (SRP), provides a significant company match. Employees who contribute 2% of their gross pay receive a 5% company match. In 2022, employees can contribute up to $20,500 annually ($27,000 if over age 50), with employer and employee contributions capped at a combined $61,000 ($67,500 if over 50). Contributions are automatically deducted from paychecks, deferring taxes until retirement when the employee might be in a lower tax bracket. Additionally, Abbott’s Freedom 2 Save program automatically contributes up to 5% of an employee’s gross salary to the SRP plan if the employee contributes at least 2% of their income to student loan repayment. This generous matching scheme and additional programs can help employees build substantial retirement savings over time. [Source: Abbott Benefits Guide, 2022, p. 10]

Abbott Laboratories has announced significant layoffs in 2024, including the closure of its Fairfield plant, which will result in nearly 200 job losses due to cost-cutting measures. This comes amidst a broader trend of job cuts in their medtech and diagnostic divisions, particularly as demand for COVID-19 tests diminishes. Additionally, Abbott is cutting 3,000 jobs globally as part of a restructuring effort to streamline operations and improve efficiencies. This news is critical for stakeholders to understand the economic and political pressures influencing these decisions, including rising inflation, shifts in demand for healthcare products, and strategic moves to maintain financial stability in a volatile market (Hoodline) (MedTech Dive) (FierceBiotech) (FiercePharma) (Press Herald).

Abbott Laboratories offers stock options and RSUs to align employee interests with company goals. Stock options are granted with a predetermined price and vesting period, while RSUs vest over a few years based on performance or tenure. In 2022, Abbott enhanced its equity programs, emphasizing performance-based RSUs. The trend continued in 2023 and 2024, with broader RSU availability and performance-linked stock options. Executives and middle management are the primary recipients, fostering long-term alignment with company performance. [Source: Abbott Annual Reports 2022-2024, p. 34] Abbott’s RSU program provides employees with shares of company stock subject to a vesting schedule based on performance milestones or years of service. Once vested, RSUs convert to stock, and their fair market value is taxed as ordinary income. Proper tax planning around RSUs is crucial to minimize tax liability, as vesting can significantly impact income and tax brackets. Employees need to decide whether to hold or sell the stock after it becomes available, considering that selling within one year of conversion results in higher tax rates compared to long-term capital gains rates for stock held for more than a year. Integrating RSUs into a comprehensive wealth management plan is essential for maximizing their benefits.

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For more information you can reach the plan administrator for Abbott Laboratories at 1295 state street Springfield, MA 1111; or by calling them at 1-866-329-6277.

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