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Big Tax Breaks for Health Savings Accounts Get Even Better for Altria Group Employees

'With recent tax rule changes, Altria Group 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 Altria Group 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 Altria Group 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.

Altria Group 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 Altria Group 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 Altria Group 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.

Altria Group 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 Altria Group 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, Altria Group 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, Altria Group 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 retirement plan at Brown & Williamson Tobacco Corporation ensure the financial security of its employees in retirement? What are the specific features and benefits incorporated into the plan that aim to provide a reliable income source for employees after they retire?

Financial Security in Retirement: The retirement plan at Brown & Williamson Tobacco Corporation (B&W) provides financial security through its defined benefit structure, which ensures a steady stream of income post-retirement. The plan integrates with the RAI 401(k) Savings Plan, Social Security, and personal savings to offer a comprehensive retirement package, helping employees secure a reliable income after they retire.

In what ways does the Broward Health Cash Balance Pension Plan accommodate employees who wish to retire early? Explain the eligibility requirements, benefits available upon early retirement, and how these may differ from benefits received at normal retirement age.

Integration with Social Security: B&W's retirement plan works in conjunction with Social Security benefits and individual savings to create a well-rounded retirement strategy. The retirement income calculation incorporates a Social Security Adjustment, which reduces the pension benefit by a portion of Social Security payments. Employees should consider the combined effect of these sources when planning their retirement income to ensure they meet their financial needs.

How does the vesting schedule work within the Broward Health Cash Balance Pension Plan, and what does it mean for employees in terms of their rights to benefits? Elaborate on how years of service impact vesting percentages and detail the consequences for employees who leave before becoming fully vested.

Eligibility for Early Retirement Pension: Eligibility for early retirement at B&W depends on the employee being at least 55 years old with a minimum of 10 years of Qualifying Service. The calculation of early retirement benefits considers factors like years of service and age, with reductions applied for retirement before age 60. Those with 30 years of service can avoid reductions even if they retire early.

What role does the Broward Health Pension Plan Committee play in the administration of the Cash Balance Pension Plan, and how does this committee ensure compliance with applicable laws and the financial soundness of the plan? Discuss the responsibilities of overseeing plan implementation and benefits management.

Payment Forms and Impact: B&W offers various forms of retirement payments, including single life annuities and joint and survivor annuities. Each option has different financial implications, with single life annuities offering higher payments but ending upon the retiree’s death, while joint annuities provide for a surviving spouse at a reduced rate. Employees must weigh these options to choose the one that best suits their financial goals.

How does the Broward Health Cash Balance Pension Plan address potential changes or amendments to its terms, and what protections are in place for employees' vested rights? Discuss the process for plan amendments and any circumstances under which the plan could be terminated.

Disability and Death Benefits: B&W’s retirement plan provides disability and pre-retirement death benefits, offering financial protection for employees and their families in unexpected circumstances. For example, a surviving spouse may receive a Pre-Retirement Surviving Spouse Annuity if the employee dies before retirement, ensuring continued financial support.

For employees with prior service history seeking to return to Broward Health, how does the Cash Balance Pension Plan facilitate the recognition of their past contributions and service? Discuss re-employment rules and how they affect benefit calculations for those returning after a break in service.

Steps to Initiate Retirement: To initiate the retirement process, employees must contact the Alight Benefits Center 60 to 90 days before their desired retirement date. The process includes understanding accrued benefits, selecting a payment form, and completing the required paperwork to ensure a smooth transition into retirement.

What options are available to employees of Broward Health regarding beneficiary designations, and how does this affect benefit distributions upon an employee's death? Detail the procedures for appointing a beneficiary and the implications of not having a designated beneficiary in place.

Accessing Benefits after Termination: Former employees who leave B&W before meeting the vesting requirements may not be eligible for full retirement benefits. However, those who complete at least five years of Qualifying Service before leaving are fully vested and can receive benefits when they reach the appropriate retirement age.

How does the Broward Health Cash Balance Pension Plan manage and calculate interest credits on cash balance accounts? Discuss the methodology for determining interest rates and the impact these credits have on overall retirement savings.

ERISA Rights: Employees participating in the B&W retirement plan are entitled to rights under ERISA, such as the right to receive information about the plan, review plan documents, and appeal denied benefit claims. These rights ensure that participants are well-informed and protected under federal law.

What challenges might Broward Health employees face when navigating the claim filing process for retirement benefits? Describe the steps involved in requesting benefits, what to do in case of a denied claim, and the importance of timely communications with the Plan Administrator.

Handling Unlocatable Participants: If participants cannot be located for benefit distribution, their payments are temporarily forfeited. However, B&W has a process to restore these benefits if the participant is later found, without the addition of interest. Employees should keep their contact information updated to avoid such issues.

How can employees contact Broward Health to learn more about the Cash Balance Pension Plan and its provisions? Provide details on the available resources, including contact information for the Employee Benefits department, and explain how these resources can assist employees in understanding their retirement options.

Contact Information for Resources: Employees can contact the RAI Benefits Administration Committee for plan-related questions or the Alight Benefits Center for administrative assistance. The Alight Benefits Center can be reached at 1-866-342-6986 or through the website www.RAIbenefits.com for help with retirement processes and questions(Brown_and_Williamson_To…).

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For more information you can reach the plan administrator for Altria Group at 6601 West Broad Street, Richmond, VA 23230; or by calling them at (804) 274-2200.