Improving Your Financial Health: Phillips 66 Guide to Leveraging HSAs for Retirement

Healthcare Provider Update: Healthcare Provider for Phillips 66 Phillips 66 offers healthcare coverage through multiple providers, primarily Aetna and Blue Cross Blue Shield (BCBS), depending on the employee's home ZIP code. Employees also have access to a Kaiser HMO option if they live in designated areas of California or Washington. The medical plans include comprehensive coverage for various healthcare services, including preventive care, regular checkups, mental health, and substance use disorder treatments. Potential Healthcare Cost Increases in 2026 Healthcare costs for Phillips 66 employees can be expected to rise significantly in 2026, reflecting broader trends impacting the Affordable Care Act (ACA) marketplace. As major insurers are filing for rate increases that may exceed 60% in certain states, Phillips 66 employees could face steep hikes in out-of-pocket premiums, especially if federal subsidies are not extended. The combination of escalating medical costs and the potential loss of enhanced subsidies means many employees may see their premium costs increase substantially, leaving them with difficult choices regarding their healthcare coverage amidst these changing economic conditions. Click here to learn more

Health Savings Accounts (HSAs) are increasingly important tools for strategic retirement planning at Phillips 66. Coupled with high-deductible health plans (HDHPs), HSAs offer a comprehensive approach to managing healthcare costs while benefiting from tax advantages.  As of 2025, the contribution limits have risen to $4,300 for individual coverage and $8,550 for family coverage, reflecting adjustments for inflation . Additionally, individuals aged 55 and older can make a $1,000 catch-up contribution, further expanding their savings potential.

Understanding HSAs

To qualify for an HSA, one must be enrolled in a high-deductible health plan. These plans generally have lower monthly premiums, which can help offset higher deductible costs. Companies, including Phillips 66, often make contributions to HSAs, helping employees manage healthcare expenses more effectively.

Unlike flexible spending accounts (FSAs), HSAs do not expire at the end of the year, allowing account holders to accumulate funds over time. Starting at age 65, individuals may withdraw HSA funds for any purpose, with non-medical withdrawals subject to standard income tax.

Tax Benefits of HSAs

HSAs offer valuable tax advantages. Contributions are made with pre-tax dollars, effectively lowering taxable income. Any growth within the account, including interest, dividends, and capital gains, is not taxed. Furthermore, withdrawals used for qualified medical expenses are also tax-free, making HSAs a unique investment vehicle with triple tax benefits.

For 2025, the minimum deductible for HSA-eligible plans is $1,650 for individuals and $3,300 for families. Those who contribute fully to their HSA and cover medical expenses out of pocket can use their HSA similarly to an investment account.  Many HSAs allow investing in options like mutual funds or stocks, including the S&P 500 index, potentially building significant value over time.

Example Scenario: HSA Growth Potential

Consider a 45-year-old couple who consistently contributes to their HSA and invests these funds, aiming for a 7% annual return. If they refrain from using the funds for current medical costs, their HSA could grow to approximately $378,000 by age 65. However, if they need to cover healthcare expenses for chronic conditions like type 2 diabetes and high blood pressure, the account may only reach around $123,000. This example demonstrates how investment and spending choices impact the long-term potential of an HSA.

Open Enrollment and HSA Selection

Featured Video

Articles you may find interesting:

As open enrollment approaches, it’s an opportune time for Phillips 66 employees to assess their health coverage options, especially regarding HDHPs and HSAs.  According to a survey by Voya Financial, around three-quarters of participants in HDHPs report better financial outcomes than those enrolled in traditional health plans.

HSAs: More Than Just Tax Savings

The benefits of HSAs extend beyond tax advantages. The ability to carry over unused funds and maintain the account independently of employment status makes HSAs a valuable option for addressing future healthcare costs in retirement. This flexibility allows HSAs to be part of a broader retirement strategy, helping individuals navigate future medical costs effectively.

HSAs offer Phillips 66 employees a structured way to prepare for retirement healthcare needs. Through careful management of contributions and withdrawals, individuals can enhance their financial readiness for retirement. By building HSA funds now, employees can better position themselves to address healthcare costs as they arise.

A recent AARP survey conducted in June 2024 found that 58% of individuals aged 60 and older were unaware that HSAs could be used for extended life insurance and certain medical costs.  This insight emphasizes a substantial opportunity for retirees to use HSAs beyond typical healthcare expenses, allowing them to preserve other retirement funds for essential living expenses and leisure.

Think of an HSA as a versatile toolkit. Just as a well-prepared toolkit is essential for home upkeep, an HSA is invaluable for managing current and future healthcare expenses. By contributing to an HSA over time, benefiting from its tax advantages, and letting it grow, individuals build a resource ready to address both unexpected and regular healthcare needs. This approach helps maintain a strong financial foundation, providing peace of mind for a fulfilling retirement.