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60 votes

Is it mandatory to have health insurance?

The individual mandate is still in effect for 2018, which means you have to have qualifying health coverage or pay a fine--I can't find the penalties for 2018 but for 2017 it was the greater of 2.5% ...
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46 votes

Are the HSA and FSA bad deals?

So who are these accounts for? What kind of person would look at an FSA or HSA account and think, "that's a great deal"? FSA: Those who have recurring expenses, or planned procedures this ...
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  • 45.7k
36 votes

What happens if you violate an IRS limit by less than 50 cents?

I don't know the answer to your question. But let me offer these thoughts: First, when it comes to over contributing to an HSA, you cannot just "pay the penalty" and be done with it, ...
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23 votes
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Put lump sum into HSA

If you go the route of transferring money from your bank account to the HSA, the money will still have been taxed for FICA. The only way to skip this is to go directly from the paycheck. Another way ...
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22 votes

Can I close my money in HSA and transfer it to another bank account and use it for non-medical purpose?

When you put money into the HSA, you didn't pay any tax on that amount. Now that you want to take money out, if you don't have any medical expenses to offset the amount you are withdrawing, you will ...
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21 votes
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Which is better: Employer-sponsored HSA or opening an HSA individually?

The big difference for me is that my contribution thorough a cafeteria plan also skips Social Security and Medicare taxes. That is a 6.2% (SS) + 1.45% (Medicare) tax on those contributions if done ...
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21 votes
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Minimizing medical costs with HSA

There's an annual contribution limit, for 2019 it is $3,500 single/$7,000 family. Otherwise, it's fine to match future contributions to prior or planned qualifying expenses so long as the account was ...
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20 votes
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How do I correct an HSA distribution when I was refunded by a health provider?

This is referred to as an HSA Mistaken Distribution. An HSA mistaken distribution occurs when you take a distribution and later find out that it is not for a qualified medical expense. For example, ...
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20 votes
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Is it worth saving HSA funds until retirement?

Yes, absolutely. The HSA, when used for medical expenses, allows you to essentially pay for your medical expenses tax free. Even if you don't have extra room in your budget, you can fund the HSA as ...
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20 votes
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Should I prioritize my 401(k) over my student loans?

Purely financially, giving up the employer match is hard to argue. It's mathematically a free 100% return, but you can't get to it for many years. So it's a great benefit for the future. On the ...
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  • 115k
20 votes
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Can I afford to take this job's high-deductible health care plan?

My opinion is that, in general, the HDHP+HSA is usually a better option for both the employee and employer than a traditional health plan. But of course, the details vary. Besides knowing the premium ...
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19 votes
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Comparing HDHP vs PPO Plans: Am I missing something?

There are a couple of things that are missing from the analysis. The PPO plans feature a copay for doctors visits and prescriptions. For example, if you need to see your doctor, under the PPO plans, ...
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18 votes

Is it mandatory to have health insurance?

I see this sort of misconception flying around. "Well the health insurance takes my money, makes a profit, and pays me only if I need it, otherwise I 'lose' money. Clearly, I would be better off ...
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18 votes
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What is the purpose of putting funds into an HSA when the interest rate is so low?

The HSA for most people, is a way to take pretax money and be able to use it for healthcare. No 7.5%/10% floor or need to itemize taxes in any way. It’s available based on the health plan you have, ...
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17 votes

Are the HSA and FSA bad deals?

For FSA, true, only someone who is a good planner should participate. Otherwise, you run the risk of losing unused money at the end of the year. Good planners can start with health categories that are ...
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16 votes
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Can I reimburse medical expenses using funds added to HSA in a later year?

Yes. From the IRS: You can receive tax-free distributions from your HSA to pay or be reimbursed for qualified medical expenses you incur after you establish the HSA. So the key date is when you ...
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15 votes

What happens if you violate an IRS limit by less than 50 cents?

What's going to happen if I just ignore this? Will someone eventually come after me for taxes, penalties and interest due on my overcontribution of 8¢? I expect nothing. If all your numbers on the ...
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  • 131k
14 votes

Is it worth saving HSA funds until retirement?

Is it worth saving HSA funds until retirement? Yes Are there pros and cons from a tax perspective? Mostly pros. This has all of the benefits of an IRA, but if you use it for medical expenses ...
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13 votes

Can I use an HSA to pay off medical debts incurred before the HSA was funded?

According to the instructions for IRS Form 8889, Expenses incurred before you establish your HSA are not qualified medical expenses. If, under the last-month rule, you are considered to be an ...
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  • 1,324
13 votes
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Can I pay myself back later in the year if my HSA doesn't have adequate funds earlier in the year to pay for an expense?

Can I pay myself back later in the year if my HSA doesn't have adequate funds earlier in the year to pay for an expense? Yes. You can request a distribution for any qualified medical expenses that ...
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  • 64.6k
13 votes

When is an HSA expense "incurred"?

There are a couple of specific criteria in the HDHP / HSA relationship. You must be enrolled in an HDHP in order to contribute funds to an HSA on a tax preferred basis. You do not need to be ...
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  • 48.6k
13 votes

What is a deductible?

Broadly, it means that you'll be responsible for the first $3,000 of medical expenses that you incur over the course of the year before insurance kicks in. There may be a co-pay as well where you're ...
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  • 20.4k
13 votes

Does an HSA have to be used exclusively for medical expenses

I just want to point out that your question implies a misunderstanding, even though you didn't explicitly mention it: I had an HSA last year. This year I have health insurance through ACA. The ...
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  • 45.7k
13 votes
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Why are excess HSA/IRA/401k/etc contributions allowed?

Some institutions enforce the limits, some don’t. However, one aspect that you may not realize is that they really don’t know what your contribution limits are. Lots of things affect your contribution ...
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12 votes
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What is the HSA contribution limit when you are only enrolled in HDHP for part of the year?

The HSA contribution limits for a partial year can be very confusing. This is discussed in IRS Publication 969. There are two different ways to determine what your limits should be: the prorated ...
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12 votes

If I make an out of pocket medical payment on my normal credit card, can I withdraw that amount from my HSA?

Yes, you certainly can. As long as you incurred the expense while you had the HSA account in place, you can pay for the expense in any way you please, and reimburse yourself later for that expense out ...
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12 votes
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Is it possible to use my HSA for a payment I've already made?

Yes, you can be reimbursed through your HSA account; see for example NerdWallet's article. Best is to see your own provider's website, of course, but HSA rules in general allow for reimbursement for ...
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  • 35k
12 votes

Does an HSA have to be used exclusively for medical expenses

If you want the tax benefits of the funds, yes, they must be used for qualified medical expenses as defined by the IRS. You can withdraw funds whenever you want, for any reason, but if they are not ...
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11 votes

Withdrawing qualified HSA expenses many years later, to earn interest?

I realize this is an old question, but it is a great question, as many people don't realize the hidden benefits of the HSA. If you are eligible for an HSA, it is important to open an account before ...
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  • 45.7k
11 votes
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Is this HSA too good to be true?

Here are the answers to your questions, from easiest to hardest. :) If I leave a HSA plan to join a PPO in the future does my saved money vanish? No, your money does not vanish. Your HSA is ...
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