HSA Flashcards
When was the HSA created?
2003, with Medicare Part D
Are premiums on HSA-qualified plans more or less than traditional plans?
HSA-eligible plans tend to be 9% cheaper
Who grants the authority for a company to become an HSA administrator/custodian?
IRS
Who can put money into an HSA?
Anyone
How many HSA’s can someone have?
Unlimited
What is ERISA?
Employers can’t restrict how funds are used or where accounts are established
What tax advantages does an employer get from offering an HSA?
Lowers the amount they’re paying payroll taxes against
What tax-advantaged accounts are HSA-compatible
Dependent care FSA, Limited purpose FSA (dental and vision expenses), Post-deductible FSA/ HRA (mostly HRA. Employer offers a post-deductible HRA that pays expenses once an employee meets a certain deductible threshold. Employers can set that deductible amount wherever, but can’t be any lower than the min deductible for HSA
What is an FSA
Wages set aside that are put into an employer-sponsored and approved account. Funds must be used before year-end or they go back to the employer. Not eligible with an HSA
What is an HRA?
An employer-sponsored program, employer only dollars. Employers make the rules.
What is an FSA rollover?
Allows an FSA participant to roll over up to 550 into the next year. Employers have to choose ths.
What is an LPFSA
If the employer creates a limited purpose or post deductible FSA, employees could use those unused funds from last years FSA into an HSA-compatible Limited Purpose FSA
FSA Grace Period
An extra 2.5 months to reimburse expenses from last year’s FSA. Taking advantage of grace periods mean you lose eligibility for an HSA until the grace period ends. You regain HSA eligibility if you have a $0 balance before the grace period begins.
How can you transfer HRA and FSA funds into an HSA?
You can’t
HSA funding limits
$3600 for individual, $7200 family
What’s a catch-up contribution?
Individuals over the age of 55 can contribute an extra $1k
What makes a health plan HSA eligible?
Min. deductible $1,400 individual, $2,800 family
Max out of pocket $7k individual, $14k family
Must not have any other coverage that is not “high deductible)
Must not be enrolled in medicare
Must not be listed as a dependent on someone else’s tax return
When does eligibility start?
The first day of the month your coverage beigns
What is the last month rule
If you have HSA-qualified insurance on Dec 1st, you can contribute the full maximum amount, but the testing period allies for 12 months
VA / Indian Health Benefits
People who seek care at either of these locations lose HSA eligibility for 3 months
Who is covered by Medicare?
Primary coverage for those over 65:
Self-employed workers, workers of a small business (under 20 employees), Retired and unemployed, Individuals receiving social security benefits.
How doe someone who is eligible for medicare become HSA-eligible
Employees of larger companies must delay medicare AND social security (which kicks in Medicare Part A and B).
How long can you delay taking social security?
Up until age 70
What happens if you forget to correct a contribution mistake?
Include the excess amount as taxable income
6% excise tax
How does a domestic partnership impact HSA contributions and withdrawals?
domestic partners can BOTH contribute the family maximum, but can’t use the funds for each other.
What is the penalty for reimbursing a non-eligible item
Taxed as income; 20% tax
no tax penalty after age 65
When does the IRS consider an expense incurred?
when you pay for the service
What tax forms does an HSA custodian have to supply?
1099 SA (withdraws made) (end of jan) 5498 SA (deposits made) (end of may)
