Big Tax Breaks for Health Savings Accounts Get Even Better for Charles River Laboratories International Employees

'With recent tax rule changes, Charles River Laboratories International 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 Charles River Laboratories International 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:

1. How health savings accounts (HSAs) work and their tax advantages.

2. Recent tax changes that expand the benefits of HSAs for Charles River Laboratories International employees.

3. 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 One Big Beautiful Budget Act, passed by Congress and signed into law in 2025, enhances HSA benefits and expands the availability of HSAs to millions more Americans -- marking the largest expansion since the program's creation in 2004.

Charles River Laboratories International 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 is $4,400 for individuals and $8,750 for family coverage. In addition, a $1,100 'catch-up' contribution is available for individuals aged 55 and older. This presents a prime opportunity for Charles River Laboratories International 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. Under the new law, eligible individuals are now allowed these individuals to continue contributing to their HSA if they retain their employer health insurance. This change could be especially beneficial for Charles River Laboratories International employees who choose to remain on the company health plan rather than enrolling in Medicare.

Additionally, the enacted law now makes 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.

Charles River Laboratories International 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 Charles River Laboratories International 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, Charles River Laboratories International 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, Charles River Laboratories International 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 pp. A1–A2.  https://www.wsj.com/personal-finance/taxes/hsa-2025-changes-6d6314eb

2. Devenir, 2 .  https://www.devenir.com/devenir-report-shows-hsa-assets-reach-nearly-147-billion-by-year-end-2024/  

3. U.S. Department of the Treasury, Jan. 2025, pp. 1–15.  https://www.irs.gov/publications/p969

4. HealthEquity, Nov. 2024, pp. 1–10.  https://www.healthequity.com/library/hsas-medicare-and-retirement-savings

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/

That same shift from growing assets to drawing them down applies directly to the pension decisions in front of you at Charles River Laboratories International. Charles River Laboratories International has frozen its defined benefit pension to new accruals, meaning your benefit is based on service and compensation accumulated up to the freeze date - but the value already locked in remains a meaningful asset worth analyzing. If a lump sum option is available, IRS segment rates in effect during the plan's lookback period directly affect the present value calculation; rising rates reduce the lump sum amount, so the rate environment at your retirement date matters. Understanding the annuity equivalent of your frozen benefit and comparing it to a potential lump sum is an important step in sequencing your retirement income from multiple sources.

On the healthcare side, Charles River Laboratories International does not offer continued medical coverage to retirees, which means coverage through the company ends when employment does. Planning for the cost of health insurance during any gap between your retirement date and Medicare eligibility at age 65 is a critical step - marketplace coverage, COBRA continuation, or a spouse's employer plan are common options. Building an accurate estimate of bridge-coverage costs into your retirement income projection prevents underestimating one of the largest variable expenses retirees face. Connecting your specific Charles River Laboratories International benefits situation to a comprehensive retirement income plan - and understanding how each component interacts - gives you the most complete picture of what retirement will look like.