Originally Posted by fisherman
I am really struggling on this one. We have funded our HSA up to the max allowed for the last several years and have also enjoyed good health so that account has grown some. The balance now would almost exactly cover our full out of pocket deductible through 2013. Our current policy is suppose to pay 100% after we meet the deductible.
If and it is a big if I understand some of the new health care law, HSAs will not be used with the new policies. We also plan to move to one of the new policies when the become available. Given this is there any reason to fund our HSA this year? Also does anyone know how we will be able to get any money left in the HSA out once we switch to the new policies?
Just looking for the best tax advantaged way to handle this.
Thank you in advance for your help!
If you have not already done so I recommend that you read IRS Pub 969 which goes into quite a bit of details about HSA distributions. You can continue to make qualified distributions from your HSA even if you change to a non-qualified plan in the future. Also, after age 64 you can make distributions from the HSA for non-medical reasons but you pay the normal tax like and IRA distribution -- but no penalty tax. Before age 65, these non-qualified distributions would trigger a 10% penalty.
Also keep in mind that there are some expenses that can be reimbursed that are not normally covered by health insurance (e.g. dental, eye glasses etc)
To me, for most people, HSAs are a no brainer. I fund ours to the maximum each year.