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DH and I had a combined HSA account prior to Obamacare but when we lost our insurance and had to get new insurance we found that it was cheaper to get separate health insurance (if you can call from $450 to $800 a month cheaper).
The problem was that I had to get my own HSA account because our insurance policy was no longer combined. I could not move my share of the contributions in the combined HSA to my own HSA. If I did then it was a taxable event, then the most I could move into my new account was the yearly max so I would lose out on this years additional max contribution. So DH's account had a nice amount of money in it because we both had been contributing our max per family for years. I had to start at $0.00 and build up again.
DH and I had a combined HSA account prior to Obamacare but when we lost our insurance and had to get new insurance we found that it was cheaper to get separate health insurance (if you can call from $450 to $800 a month cheaper).
The problem was that I had to get my own HSA account because our insurance policy was no longer combined. I could not move my share of the contributions in the combined HSA to my own HSA. If I did then it was a taxable event, then the most I could move into my new account was the yearly max so I would lose out on this years additional max contribution. So DH's account had a nice amount of money in it because we both had been contributing our max per family for years. I had to start at $0.00 and build up again.
You don't have to start a new HSA unless your employer is contributing to your HSA. Since you both have HSA qualified health plans and if you file a joint tax return, you can use the money in your first HSA to pay your bills as well. You can still contribute up to the family max each year as well, either in a single account or split between your 2 accounts. If one of you is over 55 and want to do the catch up, that extra $1000 has to go into the account owned by that person though. There really isn't anything bad about having 2 HSA's unless you are paying fees on a lower balance account. Also if you want to seed your new HSA and have qualified medical expenses out of the first account that have not been reimbursed, you could transfer funds that way. It might be worth doing to get over the $1000 or $2000 minimum balance so you don't have to pay fees on your account, but other than that, there really isn't a benefit.
Just a tip for those with HSA accounts and adult children still under age 26, if your child has an HSA at his/her employer and you have a qualified family account as well, your child can actually contribute up to the family max in his/her account. It's a nice way to seed that account when they generally don't need to use the money for medical bills.
I used to have a traditional health insurance policy plus an FSA which allowed me to set aside $2,550 pre tax / year for medical expenses (wife and me). The list of items that I was allowed to pay with FSA $ was extensive (deductibles, vision, dental, Rx etc).
This year I switched to an HSA and a High Deductible plan. The reason for my post is to alert people that you can have both an HSA and a Limited FSA! Two pre tax contributions if you can swing it. The FSA contribution is still limited to $2,550 (for a couple) but the items that can be reimbursed are limited to vision and dental expenses. The FSA money is still 'use it or lose it' unlike the HSA $ which carry over until you use it.
I used to have a traditional health insurance policy plus an FSA which allowed me to set aside $2,550 pre tax / year for medical expenses (wife and me). The list of items that I was allowed to pay with FSA $ was extensive (deductibles, vision, dental, Rx etc).
This year I switched to an HSA and a High Deductible plan. The reason for my post is to alert people that you can have both an HSA and a Limited FSA! Two pre tax contributions if you can swing it. The FSA contribution is still limited to $2,550 (for a couple) but the items that can be reimbursed are limited to vision and dental expenses. The FSA money is still 'use it or lose it' unlike the HSA $ which carry over until you use it.
Actually the FSA limit in 2017 is $2600 ($5000 for dependent care FSA). The FSA money is limited to dental and vision expenses until you meet your deductible, then you can use your FSA dollars for co-insurance after your deductible. Also, the $2600 is per person, not per couple, so if you and your wife both have access to an FSA, you both can contribute up to the $2600. The $5000 for dependent care is per household though. Companies offering an FSA can choose between a $500 roll-over or a grace period where you can actually use your FSA money into March of the following year. Any funds in excess of the $500 are forfeit or if you don't use your funds by the March deadline, you lose those dollars.
A type of savings account that allows you to set aside money on a pre-tax basis to pay for qualified medical expenses. A Health Savings Account can be used only if you have a High Deductible Health Plan (HDHP).
High-deductible plans usually have lower monthly premiums than plans with lower deductibles. By using the untaxed funds in an HSA to pay for expenses before you reach your deductible and other out-of-pocket costs like co-payments, you reduce your overall health care costs.
HSA funds roll over year to year if you don't spend them. An HSA may earn interest.
You can open an HSA through your bank or other financial institution.
HSAs are useful for high-income individuals looking to shelter income from taxes. If you view the HSA as a type of retirement account (like an IRA) then you will benefit from a reduced AGI / taxes. A former product manager at a health insurer used to call the HSA the only triple tax free investment out there -- tax free contributions, tax free growth, tax free withdrawals. However, very high-income individuals may have some of the tax benefit reduced by the AMT.
For lower income individuals who cannot get their HSA balance over the $3k - $5k minimums required to avoid monthly service fees at most Banks, the product is a bad choice. Sometimes employers subsidize these fees, in which case you can take time to build this balance.
Here's the catch. DO NOT use the HSA for routine medical expenses like deductibles and co-pays. Fund these from your cash flow. DO NOT use the debit card or checks were given to you by the HSA provider. The fees are usually quite high. Only move money into the HSA via ACH. Meet the Bank's minimum to avoid monthly service fees. Put the excess in an investment account and buy something boring like a U.S. Equities ETF. HSABank, for example, has a $5k minimum in the Bank account and then the rest can be invested with T.D. Ameritrade.
Also, maintain and download PDF copies of all EOBs (or scan) from your insurance company, dental benefits, company, and scan receipts for other qualified expenses that do not have EOBs (like a receipt for eyeglasses). In theory, if the IRS were to audit you, you will need these 20 years down the road when you want to withdraw the funds (unless you are 65+).
Finally, the gentleman from Betterment is correct in that you need to mind the fees you are paying for the investment portion of your HSA. But he did not, in my opinion, capture the value of the initial tax deduction for making the HSA contribution. So, I believe he should have compared an initial investment of $10k into the HSA vs. $6k into an after tax account.
Due to the chained CPI taking effect, the IRS has reduced the 2018 Family HSA contribution by $50. If you have already fully funded your family HSA for 2018, you may be required to request a refund of the $50 from your HSA administrator and make some changes to your 2018 tax forms.
Due to the chained CPI taking effect, the IRS has reduced the 2018 Family HSA contribution by $50. If you have already fully funded your family HSA for 2018, you may be required to request a refund of the $50 from your HSA administrator and make some changes to your 2018 tax forms.
Huh, thanks for the heads-up on this. I don't have an HSA yet, but plan to start one fairly soon.
It seems that banks offering HSA's are fairly limited. If anyone can recommend one that they have been happy with, that would be great.
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HSA + Limited FSA
