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Healthcare Provider Update: Provides medical plans through Kaiser Permanente and Aetna, along with dental, vision, HSAs, FSAs, and EAP services 4. APAs HSA-compatible plans align well with ACA trends, offering tax-advantaged savings as premiums and deductibles increase in the marketplace. Click here to learn more
For APA employees, maximizing contributions to your HSA in 2025 may be a smart way to control costs around healthcare and also grow your long-term savings for retirement, said.
With the increase in HSA contribution limits coming soon, APA employees approaching retirement should take advantage of this opportunity to grow their healthcare savings now so they can take a tax-efficient approach to future medical costs, said Sullivan.
In this article, we will discuss:
1. Limits on 2025 IRS health savings account (HSA) contributions.
2. How HSAs give you a triple tax advantage and help you control costs for healthcare.
3. HSAs & retirement planning & Medicare premiums.
The IRS has announced inflation-adjusted increases to the health savings account (HSA) contribution limits for 2025. The contribution cap for those with self-only health coverage will increase from USD 4,150 in 2024 to USD 4,300 in 2025, and for families, the maximum will increase from USD 8,300 to USD 8,550.
HSAs provide a triple tax benefit - contributions are deductible, account assets grow tax-free, and withdrawals for approved medical expenses are tax-free. Such features help HSAs manage healthcare costs.
Your high-deductible health plan must offer an HSA. For the year 2025, the IRS says the plans must carry a USD 1,650 individual deductible and USD 3,300 family deductible.Even with all these benefits, a 2023 survey by the Plan Sponsor Council of America found only 19% of HSA account holders invest—most keep their savings in cash—potentially missing big growth opportunities.
The IRS is also updating the catch-up contribution limit for APA employees over age 55 this year—keeping the USD 1,000 catch-up contribution for now.Understand HSAs and how they could benefit your financial strategy—especially with the rise of healthcare costs and retirement planning. Prompt financial decisions such as switching to a Roth IRA or drafting a will are life planning steps as well.
And for APA employees approaching retirement age: HSA money can help pay for Medicare premiums when you turn 65. That includes Medicare Advantage plans, as well as Parts B and D premiums, although Medigap premiums are not eligible for HSA expenditure. While not all medical expenses are covered by Medicare, funding these costs through HSAs could optimize your healthcare spending in retirement. A 2022 study by Fidelity Investments estimated medical costs for a retired couple would be around USD 315,000 after taxes.
Consider your health savings account (HSA) an essential tool in your financial toolkit. Like getting a new phone, increasing HSA contribution limits for 2025 gives you more options to manage and invest in your healthcare. You can think of contributing to your HSA as downloading an app that gives you triple tax benefits—deductions on contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. This keeps your health coverage as current and efficient as new technology—making your HSA a critical component of your APA retirement planning strategy.
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- 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?
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- 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. Fidelity Investments. 'HSA Contribution Limits 2024 and 2025.' Fidelity.com , 23 Jan. 2025, https://www.fidelity.com/learning-center/smart-money/hsa-contribution-limits . Accessed 5 Mar. 2025.
2. Plan Sponsor Council of America (PSCA). 'Helping Employees Enroll in HSAs.' PSCA.org , 9 Nov. 2023, https://www.psca.org/news/psca-news/2023/11/PR_2023_HSAreprot . Accessed 5 Mar. 2025.
3. Internal Revenue Service (IRS). 'Part III Administrative, Procedural, and Miscellaneous.' IRS.gov , May 2024, https://www.irs.gov/pub/irs-drop/rp-24-25.pdf . Accessed 5 Mar. 2025.
4. Woodruff Sawyer. 'IRS Releases 2025 HSA Contribution Limits and HDHP Deductible and Out-of-Pocket Limits.' Woodruffsawyer.com , 13 May 2024, https://woodruffsawyer.com/insights/2025-hsa-limits-released . Accessed 5 Mar. 2025.
5. Plan Sponsor Council of America (PSCA). 'HSAs: A Growing Retirement Savings Strategy.' 401k Specialist , Nov. 2023, https://401kspecialistmag.com/higher-numbers-of-hsas-positioned-as-retirement-savings-strategy . Accessed 5 Mar. 2025.
What is the APA 401(k) plan?
The APA 401(k) plan is a retirement savings plan that allows employees of APA to save for retirement on a tax-deferred basis.
How can I enroll in APA's 401(k) plan?
Employees can enroll in APA's 401(k) plan by completing the enrollment form available on the APA employee portal or by contacting the HR department for assistance.
What is the employer match for APA's 401(k) plan?
APA offers a matching contribution of 50% on the first 6% of employee contributions to the 401(k) plan.
When can I start contributing to APA's 401(k) plan?
Employees at APA can start contributing to the 401(k) plan after completing 30 days of employment.
What types of investments are available in APA's 401(k) plan?
APA's 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and company stock.
Can I take a loan from my APA 401(k) plan?
Yes, APA allows employees to take loans from their 401(k) accounts under certain conditions. Employees should consult the plan documents for specific terms.
What happens to my APA 401(k) if I leave the company?
If you leave APA, you have several options for your 401(k), including rolling it over to another retirement account, leaving it in the APA plan, or cashing it out, subject to taxes and penalties.
How often can I change my contribution amount to APA's 401(k) plan?
Employees can change their contribution amount to APA's 401(k) plan at any time, subject to the plan's guidelines.
Is there a vesting schedule for APA's employer match?
Yes, APA has a vesting schedule for employer contributions, which means that employees must work for a certain period before they fully own the employer match.
How can I check my balance in APA's 401(k) plan?
Employees can check their 401(k) balance by logging into the APA employee portal or by contacting the plan administrator.
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