I came across an article online awhile back that I filed in the back of my head. Kind of forgot about it until I was picking up the prescription at the pharmacy for our dog and the receipt says "FSA, etc eligible". So, while a pet prescription isn't eligible, it did remind me about that article I read on HSA and that I was going to look more into what the article said.
I've only had my HSA for a year. While I knew the contributions accumulate and do not need to be used up each year (like an FSA) what I didn't realize is that you can save eligible medical receipts and submit them for reimbursement any time in the future. You do not have to claim them in the same year they were incurred.
Here is a link to the article, if you are so inclined to read it https://www.forbes.com/sites/robertberger/2016/12/02/14-surprising-facts-about-health-savings-accounts-hsa/?sh=557ce8583e9e
An HSA is a great savings and retirement savings tool that has more benefits than I realized.
From the article:
An HSA offers triple tax benefits: An HSA is the crown jewel of tax deferred accounts. It combines the advantages of both a traditional and Roth retirement account. Contributions to an HSA are not taxed. Funds in an HSA grow tax-free. And distributions for qualified medical expenses are not taxed. It's the closest thing a free lunch you'll find anywhere.
Once my HSA reaches a certain dollar amount (in the case of the HSA I have, it's $2000) you can opt in to start investing the balance, to try to earn extra. Basically works like a 401k, being invested.
You can opt to pay your out of pocket medical expenses each year and not get reimbursed from your HSA. Save all your receipts and track them and at some point down the road you can submit for reimbursement, tax free. So, if you can, let your HSA earn from being invested, so it can grow more and hold off submitting your receipts until a later date in the future.
After you reach 65 you can also withdraw from it for any reason and just pay tax on it, as you would a 401k or IRA.
For the HSA I have my company contributes $75 a month, which is a nice benefit.
Another thing I just compared the numbers on: So adding dh to my work health insurance was going to cost me $90 more a month than what I was paying for his plan on the ACA marketplace. Well, I just saw my paycheck detail, where they withhold half the premium each paycheck (we are paid twice a month) but what I didn't know is that health insurance premiums are pre-tax. I've never had any health insurance premiums come out of my paycheck before, so I didn't know this. So, while my health insurance cost went up $90 a month, my payroll taxes are going down $144 a month!
How's this for being scatterbrained?! - as much as I hate clutter, I am AWFUL at my desk with papers! Always have been. So, I am getting my wallet out of my purse and see the folded piece of paper that is my receipt for pup's nose scope. Ok, I need to put that in my "pets" folder. Where is my pets folder? I had rearranged some things before friends came to visit, in an attempt to clean up my office (I am out of room in my filing cabinets). It's not where I keep other folders. I'm pulling open another door to a small cabinet section in my desk and also pulling out the tray that pulls out, where I have some papers and notebooks kept. That led to my big stack of half folded pieces of paper that I always use to make notes on all day when I am working. I scribble all over them, fill it up, turn it over, repeat. I had a stack of probably 20 or more. I skimmed through them and threw them in my garbage can. That led me to start going through all the other loose papers in my desk and under this tray that slides out. So, here I am tossing and organizing. Refiling. Finally towards the end I see the stack of folders I set on top of the box back in the corner under my desk. Ok, one of them is the "pet" folder. Ok....now where is that receipt I want to put in there?? Nope, nowhere to be found now! It has to be here, I didn't even leave my desk. I still have new piles I have made of things to still take care of. I look through all of them. I look between the folders. It must have thrown it away with the garbage can full of papers I just filled. So, one by one I go through all the papers in the office garbage can. Still no vet receipt. I have no idea what I did with it! That's what I get for trying to be more organized. I lose things.
We do need more protection and savings health wise so this is a good prompt. Thank you. I automatically save 1% in a HSA but we can't opt to put in more.
ReplyDeletethat's interesting you can't put in more, since there is a max contrib limit per year, plus if you are over 55 you can add an extra $1000 year. I can contribute up to $4650 this year towards it. I can either do payroll deductions, which I then get the tax break on my paycheck, or I can add more directly to the account on my own and I will get the tax break when I file my tax return and report the contribution total.
DeleteWe could do more on our own but not through payroll, work plan. Disappointing but the rule. I'd max it through work if I could.
DeleteThe last bit sounds familiar! I would go through the trash again. Or, when you get up you might find it in a fold of your clothing. I find things on me. You can get a duplicate receipt from where it came from if you want.
ReplyDeleteIt was a large regular sized piece of printer paper, that I had folded into quarters when I put it in my purse. When I took it out I opened it flat and set it on my desk...never to be found again, LOL
DeleteI love our HSA. We had a fsa for years and I hated that thing. 3 or 4 years ago I convinced my Dh to switch the insurance to the high deductible option so we could get the HSA. We have maxed out the contributions every year, and haven’t used much of it. I just save receipts so we can pay ourselves back at some point if we wish. Because Dh Is nearing retirement we have decided not to invest it. It’s a money market account, so slightly better interest than regular savings account. That needs to be good enough at this point. It’s nice knowing we have several years worth of deductible saved at this point.
ReplyDeleteForgot to sign my name. Google won’t let me sign in.
DeleteDiane
I had tried an FSA a couple different times over the years and I hated them too.
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