HSA questions (1 Viewer)

[McGarnicle]

Up until last year, I had a high deductible health care plan (HDHP) and carried an HSA with a monthly pretax contribution from my paycheck. This year my company started offering a new plan which has a lower deductible and covers more stuff with no copay, so I switched to that. The new plan no longer qualifies as an HDHP, so I am no longer eligible for an HSA according to what I've read. But, I have about $1500 still sitting in the account which carried over from last year. I am no longer making contributions to it, but I have no immediate need to spend the $1500. My questions:

[*]On my tax return I am being asked if I spent all of the money in my HSA on medical expenses. Am I allowed to answer yes although I did not spend the money in 2012 but intend to do so when the need arises?

[*]Am I still allowed to keep my HSA account open and use the funds for eligible expenses even though I no longer have an HDHP?

Anyone with any knowledge of this stuff, your insights would be much appreciated. TIA.

 

[Bucks]

I believe you are just being asked if all of your withdrawals were for qualified medical expenses; not whether or not you depleted the account. There is no urgency to spend the money. Consider it just like an IRA account. You can keep it open as long as you wish you are just restricted from making any new contributions until you are again enrolled in a qualified HDHP.

 

[DCThunder]

Don't know about HSAs, but with Flexible Spending Accounts (FSAs) which are very similar I believe, you have to spend last years money NLT March 31st of the following year or you lose the unspent balance.

 

[Ignoramus]

Don't know about HSAs, but with Flexible Spending Accounts (FSAs) which are very similar I believe, you have to spend last years money NLT March 31st of the following year or you lose the unspent balance.

They're not at all similar in this regard.

 

[DCThunder]

Don't know about HSAs, but with Flexible Spending Accounts (FSAs) which are very similar I believe, you have to spend last years money NLT March 31st of the following year or you lose the unspent balance.

They're not at all similar in this regard.

OK. I stand corrected.

 

[Dentist]

you don't have to spend it, but the next time you have a medical bill i would.. otherwise your money is just decaying to inflation unless it's invested, which i doubt it is

 

[17seconds]

It seems I have an FSA with my high deductible plan. Is that weird? Should I be telling HR to make an HSA available?

 

[Dentist]

It seems I have an FSA with my high deductible plan. Is that weird? Should I be telling HR to make an HSA available?

you should be able to open your own HSA and use that instead of the FSA which is stupid

 

[17seconds]

It seems I have an FSA with my high deductible plan. Is that weird? Should I be telling HR to make an HSA available?

you should be able to open your own HSA and use that instead of the FSA which is stupid

How is an FSA stupid? My link(sorry McG - somebody please answer his questions)

 

[Keerock]

I have an HSA which was funded and fully withdrawn from in 2012 to pay for qualified medical expenses. I know I can still make 2012 contributions to it, but can I still withdraw those funds for 2012 expenses? If so, I have already received a year end tax statement from the HSA, so would it have to be amended?

 

[McGarnicle]

you don't have to spend it, but the next time you have a medical bill i would.. otherwise your money is just decaying to inflation unless it's invested, which i doubt it is

I'm healthy as a mule, so I guess my choices are to buy a few more pairs of prescription Ray-Bans, or wait it out. I wish I could claim my dog as a dependent and use the money to pay for her vet bills, Frontline and whatnot.

 

[Dentist]

you don't have to spend it, but the next time you have a medical bill i would.. otherwise your money is just decaying to inflation unless it's invested, which i doubt it is

I'm healthy as a mule, so I guess my choices are to buy a few more pairs of prescription Ray-Bans, or wait it out. I wish I could claim my dog as a dependent and use the money to pay for her vet bills, Frontline and whatnot.

well if there's no reason to use it, don't... but remember it can sure be used for a lot of things... dental work, chriropractic work, glasses, contacts, eye exams, etc.

 

[Dentist]

It seems I have an FSA with my high deductible plan. Is that weird? Should I be telling HR to make an HSA available?

you should be able to open your own HSA and use that instead of the FSA which is stupid

How is an FSA stupid? My link(sorry McG - somebody please answer his questions)

if you can have an hsa or fsa the hsa is superior in almost every way.FSA's aren't "stupid" like i said, just a significantly inferior product

 

[Ignoramus]

It seems I have an FSA with my high deductible plan. Is that weird? Should I be telling HR to make an HSA available?

you should be able to open your own HSA and use that instead of the FSA which is stupid

How is an FSA stupid? My link(sorry McG - somebody please answer his questions)

if you can have an hsa or fsa the hsa is superior in almost every way.FSA's aren't "stupid" like i said, just a significantly inferior product

FSAs are nice if you know you are going to spend at least $X on necessary medical expenses. If you're not going to hit that, having to spend it just because you'll lose it is a lousy proposition.I'd be curious to know how much $$$ each year companies get to keep from employees' unused FSAs.

 

[snore]

you don't have to spend it, but the next time you have a medical bill i would.. otherwise your money is just decaying to inflation unless it's invested, which i doubt it is

I'm healthy as a mule, so I guess my choices are to buy a few more pairs of prescription Ray-Bans, or wait it out. I wish I could claim my dog as a dependent and use the money to pay for her vet bills, Frontline and whatnot.

well if there's no reason to use it, don't... but remember it can sure be used for a lot of things... dental work, chriropractic work, glasses, contacts, eye exams, etc.

Yup. We just used $500 of ours for glasses and contacts. HSA waaay better than FSA. We get a debit card to use on mesical expenses and the website has billpay functions for expenses. Pretty easy.

 

[Politician Spock]

you don't have to spend it, but the next time you have a medical bill i would.. otherwise your money is just decaying to inflation unless it's invested, which i doubt it is

HSAs are investment accounts. They are like IRAs that allow for tax free penalty free withdrawals to cover medical expenses.

 

[Warrior]

Watch out for fees...I have a few grand I want to drain out of my hsa because they charge $75/yr just to have my money sitting in the account ever since i switched jobs

 

[snore]

you don't have to spend it, but the next time you have a medical bill i would.. otherwise your money is just decaying to inflation unless it's invested, which i doubt it is

HSAs are investment accounts. They are like IRAs that allow for tax free penalty free withdrawals to cover medical expenses.

True. I know for ours we have to have a certain amount before we can invest. I believe only funds above this amount can be used for the investment. Not sure if this is only a restriction placed by the administrators of the acct or if is some sort of federal guideline.

 

[Dentist]

Yes but most people just have it in cash or money market

 

[Keerock]

I have an HSA which was funded and fully withdrawn from in 2012 to pay for qualified medical expenses. I know I can still make 2012 contributions to it, but can I still withdraw those funds for 2012 expenses? If so, I have already received a year end tax statement from the HSA, so would it have to be amended?

 

[snore]

I have an HSA which was funded and fully withdrawn from in 2012 to pay for qualified medical expenses. I know I can still make 2012 contributions to it, but can I still withdraw those funds for 2012 expenses? If so, I have already received a year end tax statement from the HSA, so would it have to be amended?

I believe you can withdraw the funds this year for last years expenses but it would count as a distribution on your 2013 taxes. Obviosly keep your receipts in case of audit. Disclaimer: I am not a hsa expert and would suggest you reach out to whomever does your taxes and/or the administrator of your hsa account.

 

[JoeSteeler]

It seems I have an FSA with my high deductible plan. Is that weird? Should I be telling HR to make an HSA available?

you should be able to open your own HSA and use that instead of the FSA which is stupid

How is an FSA stupid? My link(sorry McG - somebody please answer his questions)

if you can have an hsa or fsa the hsa is superior in almost every way.FSA's aren't "stupid" like i said, just a significantly inferior product

FSAs are nice if you know you are going to spend at least $X on necessary medical expenses. If you're not going to hit that, having to spend it just because you'll lose it is a lousy proposition.I'd be curious to know how much $$$ each year companies get to keep from employees' unused FSAs.

Don't forget it works the other way as well. An employee can go to the doctor on 1/1 and use all of their money and then quit. The company is out that money. Most companies also offer a grace period where the employee has 2 1/2 months after the plan year ends to incur charges. Unless your estimate is way off it shouldn't be a problem using the money.

 

[culdeus]

I just don't understand HSA vs. FSA. Why is this better.

FSA you could draw to a negative balance while meeting your deductible. HSA you have to pre-pay and wait to get that money clawed back in the next FY.

If you are using two HSA one for husband and one for wife then your deductible will chew up nearly all the max buy in anyways. I joked that we should divorce to be able to take full advantage of this system, we'd also be able to continue using ROTH IRA as well if we divorced among other things.

 

[belljr]

I just don't understand HSA vs. FSA. Why is this better.

FSA you could draw to a negative balance while meeting your deductible. HSA you have to pre-pay and wait to get that money clawed back in the next FY.

If you are using two HSA one for husband and one for wife then your deductible will chew up nearly all the max buy in anyways. I joked that we should divorce to be able to take full advantage of this system, we'd also be able to continue using ROTH IRA as well if we divorced among other things.

fsa -use it or lose ithsa - roll over

that is a big difference

 

[culdeus]

I just don't understand HSA vs. FSA. Why is this better.

FSA you could draw to a negative balance while meeting your deductible. HSA you have to pre-pay and wait to get that money clawed back in the next FY.

If you are using two HSA one for husband and one for wife then your deductible will chew up nearly all the max buy in anyways. I joked that we should divorce to be able to take full advantage of this system, we'd also be able to continue using ROTH IRA as well if we divorced among other things.

fsa -use it or lose ithsa - roll over

that is a big difference

I'm surely missing something.

My wife has HSA so do I.

As a result she has a max into it of roughly 3300 bucks. Of this 1500 are paid by employer. Maybe 1800, I forget.

Her deductible is now 3000. She will hit her deductible and likely have co-pays that exceed the 300 bucks. Easily. I won't carry over a dime of this. I will carry over my own HSA, but that's because I don't have any health issues.

Based on my understanding I can't pay any more in to roll it over and because her employer pay is pro-rated I have to come out of pocket early and then apply for reimbursement later in the year when the account is funded, or else stroke a check early on for my end and come out of that.

With the FSA it was like a credit card with a revolving balance. They didn't give a #### when you drew down on it.

 

[belljr]

that is correct, however with the fsa you would have lost your fsa for not using it.

however there are tines with an fsa that you may have to ask for a reimbursement also pending on unique circimstances

 

[culdeus]

that is correct, however with the fsa you would have lost your fsa for not using it.

however there are tines with an fsa that you may have to ask for a reimbursement also pending on unique circimstances

I never lost anything out of the FSA. If it looked like we were going to run over her dr were good about letting us refill 3 months out in December to 0 out the balance. Would also get our contacts and glasses in either dec or jan depending on where we sat.

I did find out that I can use my HSA to fund my wife's expenses even though she's not on my plan.

 

[belljr]

that is correct, however with the fsa you would have lost your fsa for not using it.

however there are tines with an fsa that you may have to ask for a reimbursement also pending on unique circimstances

I never lost anything out of the FSA. If it looked like we were going to run over her dr were good about letting us refill 3 months out in December to 0 out the balance. Would also get our contacts and glasses in either dec or jan depending on where we sat.

I did find out that I can use my HSA to fund my wife's expenses even though she's not on my plan.

you were diligent in tapping out the fsa.all i was saying was if you had an fsa say 3k but only used 1k you lose the extra 2k. where the hsa you can roll over .

there is one extra benefit to the hsa and i cant seem to remember right now what it is... so i suck

 

[Nick Vermeil]

Looks like everyone is on top of this but if you have further questions, let me know. I manage the HSA for my company.

 

[jamny]

Seems to me that an HSA is better for people who are relatively healthy and expect to be able to roll it over for a few years for when an emergency hits.

 

[Sarnoff]

that is correct, however with the fsa you would have lost your fsa for not using it.

however there are tines with an fsa that you may have to ask for a reimbursement also pending on unique circimstances

I never lost anything out of the FSA. If it looked like we were going to run over her dr were good about letting us refill 3 months out in December to 0 out the balance. Would also get our contacts and glasses in either dec or jan depending on where we sat.

I did find out that I can use my HSA to fund my wife's expenses even though she's not on my plan.

you were diligent in tapping out the fsa.all i was saying was if you had an fsa say 3k but only used 1k you lose the extra 2k. where the hsa you can roll over .

there is one extra benefit to the hsa and i cant seem to remember right now what it is... so i suck

An HSA can be used like a 401k/IRA. You can keep rolling over the balance, build it up, invest it in stocks/bonds/mutual funds, then, when you hit retirement age, you can withdraw the balance for any reason (not only health-care related).

 

[belljr]

Seems to me that an HSA is better for people who are relatively healthy and expect to be able to roll it over for a few years for when an emergency hits.

also better for higher oop/ deductibles

 

[Gamma1210]

My wife has excellent insurance through her employer (teacher). Would it be possible for me to sign up for an HSA through my employer and use that to pay any out of pocket expenses? We are both young and relatively healthy. I was thinking I could begin to bank HSA money and roll it over each year and then have a nice savings when we have kids. I did think I read somewhere you can't combine and high deductible plan with a low deductible plan which does make sense. Does anyone know all the rules in a situation like this?

 

[fourd]

My wife has excellent insurance through her employer (teacher). Would it be possible for me to sign up for an HSA through my employer and use that to pay any out of pocket expenses? We are both young and relatively healthy. I was thinking I could begin to bank HSA money and roll it over each year and then have a nice savings when we have kids. I did think I read somewhere you can't combine and high deductible plan with a low deductible plan which does make sense. Does anyone know all the rules in a situation like this?

You can only establish/contribute to an HSA if you have a qualifying high deductible health plan. If you stay on her plan you would not be eligible.

 

[fantasycurse42]

Doesn't help the OP, but I bet a lot of people come in here have an FSA too...

https://fsastore.com/

Good link.