HSA

Question 1

When was the HSA created?

Answer 1

2003, with Medicare Part D

Question 2

Are premiums on HSA-qualified plans more or less than traditional plans?

Answer 2

HSA-eligible plans tend to be 9% cheaper

Question 3

Who grants the authority for a company to become an HSA administrator/custodian?

Answer 3

IRS

Question 4

Who can put money into an HSA?

Answer 4

Anyone

Question 5

How many HSA’s can someone have?

Answer 5

Unlimited

Question 6

What is ERISA?

Answer 6

Employers can’t restrict how funds are used or where accounts are established

Question 7

What tax advantages does an employer get from offering an HSA?

Answer 7

Lowers the amount they’re paying payroll taxes against

Question 8

What tax-advantaged accounts are HSA-compatible

Answer 8

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

Question 9

What is an FSA

Answer 9

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

Question 10

What is an HRA?

Answer 10

An employer-sponsored program, employer only dollars. Employers make the rules.

Question 11

What is an FSA rollover?

Answer 11

Allows an FSA participant to roll over up to 550 into the next year. Employers have to choose ths.

Question 12

What is an LPFSA

Answer 12

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

Question 13

FSA Grace Period

Answer 13

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.

Question 14

How can you transfer HRA and FSA funds into an HSA?

Answer 14

You can’t

Question 15

HSA funding limits

Answer 15

$3600 for individual, $7200 family

Question 16

What’s a catch-up contribution?

Answer 16

Individuals over the age of 55 can contribute an extra $1k

Question 17

What makes a health plan HSA eligible?

Answer 17

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

Question 18

When does eligibility start?

Answer 18

The first day of the month your coverage beigns

Question 19

What is the last month rule

Answer 19

If you have HSA-qualified insurance on Dec 1st, you can contribute the full maximum amount, but the testing period allies for 12 months

Question 20

VA / Indian Health Benefits

Answer 20

People who seek care at either of these locations lose HSA eligibility for 3 months

Question 21

Who is covered by Medicare?

Answer 21

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.

Question 22

How doe someone who is eligible for medicare become HSA-eligible

Answer 22

Employees of larger companies must delay medicare AND social security (which kicks in Medicare Part A and B).

Question 23

How long can you delay taking social security?

Answer 23

Up until age 70

Question 24

What happens if you forget to correct a contribution mistake?

Answer 24

Include the excess amount as taxable income

6% excise tax

Question 25

How does a domestic partnership impact HSA contributions and withdrawals?

Answer 25

domestic partners can BOTH contribute the family maximum, but can’t use the funds for each other.

Question 26

What is the penalty for reimbursing a non-eligible item

Answer 26

Taxed as income; 20% tax

no tax penalty after age 65

Question 27

When does the IRS consider an expense incurred?

Answer 27

when you pay for the service

Question 28

What tax forms does an HSA custodian have to supply?

Answer 28

1099 SA (withdraws made) (end of jan)
5498 SA (deposits made) (end of may)