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Multiple Health Savings Accounts???
Old 01-24-2009, 11:03 AM   #1
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Multiple Health Savings Accounts???

I did a quick search on the forum and net and couldn't find the answer.

I have stalled long enough and want to setup my 2008 HSA. I plan to do that with Health Savings Administrators, invested in Vanguard funds. I was also thinking of putting some of my 2009 contribution in an HSA at my local Credit Union for easier access and they don't charge the high fees that the Health Savings Administrators does for a debit account.

Is there any problem having more than one HSA account?

Jeb
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Old 01-24-2009, 11:49 AM   #2
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To the best of my knowledge you can have multiple HSA accounts as long as you do not exceed the max. contribution allowed per year.
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Old 01-24-2009, 12:51 PM   #3
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Originally Posted by Jeb-NY View Post
I did a quick search on the forum and net and couldn't find the answer.

I have stalled long enough and want to setup my 2008 HSA. I plan to do that with Health Savings Administrators, invested in Vanguard funds. I was also thinking of putting some of my 2009 contribution in an HSA at my local Credit Union for easier access and they don't charge the high fees that the Health Savings Administrators does for a debit account.

Is there any problem having more than one HSA account?

Jeb
The only problem I can see is the additional expense.
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Old 01-26-2009, 09:41 AM   #4
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Thanks for the info. I called the credit union this morning and their account has no fees, it only pays 1% but that is as good as or better than the ones I looked at that have all kinds of fees. So I guess I will go forward with two accounts one for long term medical invested in Vanguard and a local credit union checking account for day to day expenses beyond what the budget can handle.

I did ask the Indian sounding lady that answered the Credit Unions 800 number about multiple accounts but she didn't know and said to consult my tax consultant. I don't have one.

Jeb...
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Old 01-26-2009, 09:54 AM   #5
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Jeb,

Why not just pay your medical expenses with your non-HSA funds, and then reimburse yourself from the HSA Administrators HSA every few years? You do not need to take the HSA money out in the year you had the medical expenses.

HSAs are different from how they are usually represented. That is, they are represented as free money that you can use for medical expenses. You put the money in the HSA account, and then you use this magic debit card to pay with the free money.

I view an HSA account as an IRA. The only difference is that withdrawals are tax-free as long as they don't exceed your medical expenses.

It's important not to get caught up in viewing it the first way (free money, debit card). That view is only remotely correct if you are so cash-strapped that you need your HSA money to pay for medical expenses.
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Old 01-26-2009, 10:11 AM   #6
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Some things to keep in mind. The HSA shields the income in the account from tax as long as you use it for eligible medical expenses, which are generally broader than eligible medical expenses under a Flexible Spending Account. It actually operates as an IRA once you attain age 65 in that withdrawals can be made for any purpose and one is taxed on such withdrawals in the same manner, I suppose, as IRA withdrawals. If you're age 50 or older, you can make an additional catch-up contribution, $900 in 2008, $1000 in 2009. Further, your spouse, if over 50, can fund her own HSA by contributing a catch-up contribution to her own plan; in other words, you can have a family plan with one spouse funding the HDHP-HSA, and the other spouse can piggy-back off of that plan by funding her own HSA with a spousal catch-up contribution -- this is something I recently realized.
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Old 01-26-2009, 10:25 AM   #7
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My plan is to keep most of my HSA money in the Vanguard investment, just as you say as a pseudo IRA (actually a tax deductible Roth), but wanted some funds available for expenses if really needed. I only plan on keeping a thousand or two in the second account.

Jeb
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Old 01-26-2009, 02:55 PM   #8
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Some things to keep in mind. The HSA shields the income in the account from tax as long as you use it for eligible medical expenses, which are generally broader than eligible medical expenses under a Flexible Spending Account. It actually operates as an IRA once you attain age 65 in that withdrawals can be made for any purpose and one is taxed on such withdrawals in the same manner, I suppose, as IRA withdrawals. If you're age 50 or older, you can make an additional catch-up contribution, $900 in 2008, $1000 in 2009. Further, your spouse, if over 50, can fund her own HSA by contributing a catch-up contribution to her own plan; in other words, you can have a family plan with one spouse funding the HDHP-HSA, and the other spouse can piggy-back off of that plan by funding her own HSA with a spousal catch-up contribution -- this is something I recently realized.
If I understand you correctly, Even though I have one family HDHP for both myself and DW, Each of us can have a seperate HSA account? How do you determine the max. contribution for each acct?
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Old 01-26-2009, 03:01 PM   #9
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If I understand you correctly, Even though I have one family HDHP for both myself and DW, Each of us can have a seperate HSA account? How do you determine the max. contribution for each acct?
I think what's being said here is one spouse can fund the HSA to the tune of $6,950 ($5950 + $1000 catch-up for 2009) and the other spouse could open one up and deposit in their $1000 catch-up.

But unlike the 401K, the HSA eligibility age for catch-up contributions is 55, not 50.
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Old 01-26-2009, 03:16 PM   #10
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If I understand you correctly, Even though I have one family HDHP for both myself and DW, Each of us can have a seperate HSA account? How do you determine the max. contribution for each acct?
One HSA eligible insurance policy allows for one family HSA account (in the name of the primary insurance holder) or two separate spousal accounts.

Separate spousal accounts are limited to $2900 each in 2008 plus the additional $900 each for over 55. One family account would be limited to $5800 plus one additional $900 contribution, even if both spouses are over age 55.

One you reach age 65 withdrawals are penalty free but if not used for qualified medical purposes are taxed at ordinary income rates like an IRA. Eligible medical expenses are quite extensive and not audited by the custodian. I foresee no difficulty maxing the contribution now, leaving it 'till age 65 (perhaps beyond) and then spending only on medical.

I'm setting up a spousal account for '08 to take advantage of the extra $900. Every little bit helps.

Michael
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Old 01-26-2009, 03:59 PM   #11
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Originally Posted by Jeb-NY View Post
I did a quick search on the forum and net and couldn't find the answer.

I have stalled long enough and want to setup my 2008 HSA. I plan to do that with Health Savings Administrators, invested in Vanguard funds. I was also thinking of putting some of my 2009 contribution in an HSA at my local Credit Union for easier access and they don't charge the high fees that the Health Savings Administrators does for a debit account.

Is there any problem having more than one HSA account?

Jeb
I have 2 HSAs exactly as you describe: an HSA HSA and a money-market HSA at a bank. I'm saving up in the bank HSA for Lasik.
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Old 01-26-2009, 07:15 PM   #12
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Separate spousal accounts are limited to $2900 each in 2008 plus the additional $900 each for over 55. One family account would be limited to $5800 plus one additional $900 contribution, even if both spouses are over age 55.

I'm setting up a spousal account for '08 to take advantage of the extra $900. Every little bit helps.

Michael
One family account in my case, plus my catch-up contribution of $900 and then my wife's separate HSA which solely has her $900 catch-up contribution for 2008; then in 2009, she'll make another catch-up contribution in her HSA and I'll fully find our family account plus my catch-up at the same time. And as someone pointed out, the catch-up is available for those 55 and over.
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