Are You Fully Leveraging Your Health Savings Account as a PPG Industries Employee?

Healthcare Provider Update: Healthcare Provider for PPG Industries: PPG Industries, a global supplier of paints and coatings, typically partners with prominent healthcare providers in the corporate sector to offer comprehensive health insurance plans for its employees. Specific providers can vary by region but may include nationwide insurers such as UnitedHealthcare, Anthem Blue Cross Blue Shield, or Cigna, depending on the company's benefits structure. Potential Healthcare Cost Increases for PPG Industries in 2026: In light of anticipated changes in the healthcare landscape, PPG Industries may face significant healthcare cost increases in 2026. As record premium hikes are projected, with some states experiencing increases over 60%, the loss of enhanced federal premium subsidies could exacerbate financial strains on employees. Reports indicate that over 22 million participants in the ACA marketplace might see an astounding rise in out-of-pocket premiums, with average hikes anticipated to exceed 75%. This challenging environment could compel PPG to reevaluate its employee health benefits strategy to mitigate costs and maintain adequate coverage. Click here to learn more

Health Savings Accounts (HSAs) were introduced under the administration of George W. Bush in 2003, but their adoption was initially slow, with only about $10 billion in assets by the end of their first decade. However, growth surged in the years that followed, particularly alongside the rise of high-deductible health plans, which are a prerequisite for HSA eligibility.  By the end of 2023, HSA assets had grown to over $123 billion, according to data from consulting firm HSA Devenir .

A significant portion of HSA funds—$77 billion—remains in savings accounts, primarily used to cover out-of-pocket healthcare expenses. Meanwhile, $46 billion has been allocated for long-term investment in bonds, despite recent market fluctuations affecting balances. The investment feature within HSAs has gained popularity due to its substantial tax advantages, such as pre-tax contributions, tax-deferred growth, and tax-free distributions for qualified medical expenses, making HSAs more appealing than other retirement vehicles like IRAs and 401(k)s.

Concerns about contributing too much to HSAs may seem misplaced given the account's flexible withdrawal options. In cases where the account balance exceeds expected healthcare expenses, there are two primary strategies to access the funds while maintaining the tax benefits.

Strategy 1: Spend Now, Reimburse Later

This strategy encourages using non-HSA funds for immediate healthcare costs, allowing the HSA balance to grow tax-free. One of the greatest flexibilities of HSAs is the lack of a time limit for reimbursing yourself for past medical expenses, as long as you maintain proper documentation. For instance, if a PPG Industries employee paid $5,000 for medical expenses from a non-HSA account in 2023 and then contributed the maximum family limit of $8,300 to their HSA in 2024 without using it, they could reimburse themselves in December 2024 for the $5,000 spent on 2023 healthcare. This reimbursement would be tax-free, provided they can document the 2023 expenses. While this strategy allows for tax-free fund access, it may be more beneficial to preserve HSA funds for maximum tax-free growth.

Strategy 2: HSA Withdrawals After Age 65

Once you reach age 65, HSA withdrawal rules become even more flexible. Funds can be withdrawn for any purpose, much like distributions from a traditional IRA or 401(k), where withdrawals are taxed but enjoy prior tax-free contributions and growth. This makes HSAs a powerful additional savings vehicle for retirement. For PPG Industries employees who used non-HSA assets for medical expenses and preserved their HSA funds, these funds can be accessed for any reason after age 65, as long as past medical expenses are documented.

The Importance of Strategic HSA Management

While HSAs offer flexible withdrawal options, it’s essential to manage them strategically, especially considering inheritance scenarios. Unlike IRAs, HSAs do not offer the same tax benefits when inherited by non-spouses, as the inherited funds become fully taxable. PPG Industries employees with HSAs may want to consider spending these funds on healthcare expenses or designating charitable beneficiaries, who would not face tax liabilities on inherited amounts.

A well-thought-out strategy is crucial for HSA beneficiaries. Spouse beneficiaries can continue to enjoy HSA tax benefits, but in cases where a non-spouse is the beneficiary, it is advisable to prioritize strategic withdrawals to minimize tax impacts.

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In conclusion, the evolution of HSAs highlights their growing recognition as both a healthcare funding and retirement resource. Their dual tax efficiency and flexibility make them a valuable part of any comprehensive financial strategy, especially for PPG Industries employees seeking to effectively manage healthcare costs while optimizing retirement savings growth. HSAs are not just tools for managing healthcare expenses; they are also essential components of a broader financial plan.

According to a recent study by the Employee Benefit Research Institute (EBRI) in April 2023, one key aspect of HSAs is their significance for individuals approaching retirement . The study revealed that those over 55 with HSAs had significantly higher average balances ($45,000) compared to their younger counterparts. This underscores the importance of HSAs not only as a tool for managing healthcare expenses but also as an essential asset in retirement planning. Many in this demographic take advantage of the catch-up contribution (an additional $1,000 allowed for individuals over 55), further bolstering their financial stability during retirement transitions.

Think of an HSA as a hybrid financial vehicle: it combines long-term tax savings with the power of investment growth. Just as a hybrid car uses both fuel and electricity to optimize efficiency and performance, an HSA leverages both immediate tax benefits and future financial growth opportunities to optimize healthcare and retirement savings. By funding short-term medical expenses with tax-advantaged dollars and growing investments for future use, the HSA mirrors the flexibility and long-term benefits of a hybrid, making it a key component of PPG Industries's strategic retirement planning.