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

Xcel Energy Employees, Prepare for Enhanced HSA Benefits in 2025

Healthcare Provider Update: Healthcare Provider for Xcel Energy Xcel Energy primarily collaborates with UnitedHealthcare to provide healthcare benefits for its employees. This partnership allows Xcel Energy to offer a range of health plans that cater to the diverse needs of its workforce. Potential Healthcare Cost Increases for Xcel Energy in 2026 Looking ahead to 2026, Xcel Energy employees should be prepared for significant healthcare cost increases as industry trends suggest substantial premium hikes. Reports indicate that some states may see ACA marketplace premiums soar by over 60%. In addition to this, employers like Xcel Energy may shift more costs to employees, with many anticipated to increase deductibles or coinsurance due to rising medical expenses. As the market braces for these changes, it becomes essential for employees to stay informed about benefit adjustments, optimize their healthcare plan choices, and explore proactive financial strategies to mitigate the impact of these increased costs. Click here to learn more

For Xcel Energy 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, Xcel Energy 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 Xcel Energy 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 Xcel Energy 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 Xcel Energy retirement planning strategy.

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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 retirement savings options does Xcel Energy offer to its employees?

Xcel Energy offers a 401(k) Savings Plan that allows employees to save for retirement through pre-tax and Roth after-tax contributions.

How does Xcel Energy match employee contributions to the 401(k) plan?

Xcel Energy provides a matching contribution to the 401(k) plan, which is based on a percentage of the employee's contributions, helping to enhance retirement savings.

What is the eligibility requirement for Xcel Energy's 401(k) Savings Plan?

Employees are eligible to participate in Xcel Energy's 401(k) Savings Plan after completing a specified period of employment, typically within the first year.

Can employees at Xcel Energy contribute to their 401(k) plan while on leave?

Yes, employees can continue to contribute to their 401(k) plan while on certain types of leave, depending on the specific circumstances and plan rules.

What investment options are available in Xcel Energy's 401(k) Savings Plan?

Xcel Energy's 401(k) Savings Plan offers a variety of investment options, including target-date funds, stock funds, bond funds, and stable value funds.

Is there a vesting schedule for the employer match in Xcel Energy's 401(k) plan?

Yes, Xcel Energy has a vesting schedule for the employer match, meaning employees must work for the company for a certain period to fully own the matched contributions.

How can Xcel Energy employees access their 401(k) account information?

Employees can access their 401(k) account information through the Xcel Energy benefits portal or by contacting the plan administrator directly.

What is the maximum contribution limit for Xcel Energy's 401(k) plan?

The maximum contribution limit for Xcel Energy's 401(k) plan is subject to IRS regulations, which are updated annually. Employees should check the current limits for accurate figures.

Does Xcel Energy offer a loan option against the 401(k) plan?

Yes, Xcel Energy allows employees to take loans against their 401(k) savings, subject to certain conditions and limits as outlined in the plan documents.

What happens to my 401(k) savings if I leave Xcel Energy?

If you leave Xcel Energy, you can choose to roll over your 401(k) savings to another retirement account, leave it in the Xcel Energy plan (if eligible), or withdraw the funds, subject to taxes and penalties.

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For more information you can reach the plan administrator for Xcel Energy at 414 Nicollet Mall Minneapolis, MN 55401; or by calling them at 612-330-5500.