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Obsidian Planning

Obsidian Market Update 08/05/2023

Economic Update

Three Tax-Advantaged Medical-Expense Savings Accounts

In the 1980s, Congress allowed a limited number of healthcare consumers to set aside tax-free funds to pay medical expenses on a tax-free basis. Twenty years later, the Bush Administration suggested expanding these plans to consumers with high-deductible health plans.

Fast forward through much Congressional debate and regulation wrangling to the present, and there are three IRS-approved plans available to consumers: health savings accounts (HSAs), FSAs flexible spending accounts (FSAs), and health reimbursement accounts (HRAs). Here’s a quick summary of the three.

Health Savings Account

These accounts are for individuals with high-deductible plans and are owned by the individual. Contributions are made with pre-tax dollars and, in 2023, are limited to $3850 for those with individual health insurance plans and $7750 for those with family plans. Funds earn interest, can be rolled over year after year, and withdrawals for qualified medical expenses are not taxed. High deductible health plans are those with a $1500 (minimum) individual deductible and $3000 family deductible, and out-of-pocket expenses of $7500 for an individual and $15,000 for a family.

Flexible Spending Account

These plans are employer sponsored, usually in conjunction with an employer health insurance plan. (FSAs cannot be used with plans from the marketplace.) Employees make contributions with pre-tax dollars via payroll deductions up to a limit in 2023 of $3050 (per year / per employer). Funds do not earn interest, only some funds can roll over, and they can be used for qualified medical expenses, copayments, and deductibles, but not insurance premiums. Two important notes: 

  • A married couple can each deposit as much as $3050 in an FSA.
  • Because unused funds stay with an employer if you leave employment, please carefully calculate your annual medical expenses before deciding on the amount of your payroll deduction.

Health Reimbursement Account

Like an FSA, employers set up these accounts but unlike FSAs, only employers can contribute to them (i.e., no payroll deductions are allowed). There’s no limit to how much employers can contribute to an HRA, but they cannot give back any funds an employee does not use.  Employers determine how much to contribute and whether funds can roll over year after year. Funds in these accounts do not earn interest.

The “best” account depends, of course, on your unique circumstances. Let’s talk about whether and how you can benefit from one of these tax-saving plans.


Plant-Based or Plant-Forward Nutrition?

Years of research regarding plant-based diets (e.g., vegetarian and Mediterranean) provide evidence that they reduce the risk of heart disease, diabetes, and certain cancers. Yet, years of eating meat every day make it hard for many Americans to become vegetarians or vegans overnight. 

There’s no need to go cold turkey! (Sorry, we just couldn’t resist.) We can reduce the amount of meat we eat by taking just a few simple steps.

  • Think of meat as a garnish, rather than the centerpiece of a meal.
  • Try cooking a vegetarian meal just one night a week.
  • Start out the day with whole grains and fresh fruit.
  • Satisfy your dessert cravings with fruit, and snack cravings with hummus, guacamole or salsa.

The Transition to Schwab Is in High Gear

If you currently receive statements from TD Ameritrade, please take a moment to read this article and a more detailed version in our July 8 newsletter.

August 1 was the date Schwab set for sending out website access information (either by email or U.S. Mail) to our clients who have been on the TD Ameritrade platform for the past several years. Just as you were able to access your account information on using a username and password that you set, you’ll be able to do the same on Schwab’s client portal.

Please Note: If you previously provided digital access to a person with an authorized role in your account, including Limited Trading Authority, Full Trading Authority, or Power of Attorney, that person will continue to have digital access to your account once it has moved to Schwab.

If you’ve set the person up with an Account Inquiry role or they do not have an authorized role, that person will not have access to your account after it moves to Schwab.

To give someone access to your account once your account has moved to Schwab, log in to with your new username and password and click the Account Settings tab. From there, you’ll be able to start the process to add a person to your account.

If you have any questions about the transition, please don’t hesitate to contact any Obsidian team member.

How We Help

Control Medical Expenditures

Controlling medical expenses is a common topic for conversation during our annual review meetings, so we highlighted the three types of tax-advantaged health savings accounts in this newsletter. As always, we are happy to talk with you about which type might work best for you and how to appropriately fund an account. If you or someone you know has questions about these accounts, please give us a call or feel free to send them our way.

Advisory Services offered through Obsidian Personal Planning Solutions, LLC. Securities are offered through Triad Advisors, member ​FINRA/SIPC.​ Obsidian Personal Planning Solutions, LLC, and Obsidian Personal Planning Solutions, Inc, are not affiliated with Triad Advisors.

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