Originally Posted by Bogie
Being retired we don't have enough healthcare deductions to meet the healthcare threshold of I think it is 10%. Has anyone been using the HSA this way to be able to deduct the entire premium for HDHC?
Almost. Everything except
the insurance premiums come out of the HSA. That's really what they were created for, not as taxfree investment vehicles. The premiums are generally not allowed from the HSA, with a few exceptions.
No penalty or taxes will apply if the money is withdrawn to pay premiums for:
- Qualified long-term care insurance; or
- Health insurance while you are receiving federal or state unemployment compensation; or
- Continuation of coverage plans, like COBRA, required under any federal law; or
- Medicare premiums.
We put the the family limit (including my top-up extra thousand for being old) into the account every year, and take that as a tax deduction. It comes right off the top on the front side of the 1040, along with IRA contributions for those that still have earned income.
Medical bills are paid with a debit card or checks linked to the account.
When I hit 65, the remaining funds in the account will be used to cover Medicare-related premiums, which IS an allowed expense