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HSA (logistics)
Old 12-02-2009, 08:13 AM   #1
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HSA (logistics)

Well... next month we're starting with a medical coverage with an HSA option. The plan is great (with a large employer contribution) and simply too good to pass up.

Anyway, I did some searching of existing posts but did not specifically come across answers to the following questions (at times, I can be search challenged, so don't yell if I have simply missed them):

+ Once funds are in HSA they can be used for qualified med expenses (incurred after the HSA start date) of the account owner and any dependents he/she may have even if:
The account owner no longer participates in the any/original HSA compatible plan?
The dependent did not exists at the time funds were deposited in the account (e.g., new kid)?

+ What type of receipts should I keep? Summary of benefits or actual checks/credit card statements?

Also, from what I have gathered the incurred med expenses never expire and can be claimed at any time (even 10-15 yrs down the road). Just wondering, how many of you have decided to go that route?

Thanks!
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Old 12-02-2009, 09:24 AM   #2
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I'd guess "Yes, definitely" for the first two questions, but I admit I've seen nothing on this.

As for receipts, I just scan in the medical bills or the cash register receipts. Everything from colonoscopy to bandaids.

Quote:
Also, from what I have gathered the incurred med expenses never expire and can be claimed at any time (even 10-15 yrs down the road). Just wondering, how many of you have decided to go that route?
That's exactly what I'm doing. I have about three years of scanned in stuff, and it's all backed up regularly. I save the hardcopies too.

Here's the system I've settled on for keeping track. When I scan in a receipt, I store in the "My Documents\Medical Expenses\2009\" folder. I give it a name like "AlFluShot24.99.jpg". Then when I'm downloading credit card info into Quicken, I see the $24.99 from Walgreen's, and I can check and see that it was a flu shot, and put it in as a medical expense.
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Old 12-02-2009, 09:38 AM   #3
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What Al said.

This site can answer many of your HSA questions: U.S. Treasury - HSA Frequently Asked Questions

Since I'm only a couple of years away from Medicare, I'm particularly interested in this provision:
Quote:
What happens to the money in a Health Savings Account after you turn age 65?
You can continue to use your account tax-free for out-of-pocket health expenses. When you enroll in Medicare, you can use your account to pay Medicare premiums, deductibles, copays, and coinsurance under any part of Medicare. If you have retiree health benefits through your former employer, you can also use your account to pay for your share of retiree medical insurance premiums. The one expense you cannot use your account for is to purchase a Medicare supplemental insurance or “Medigap” policy.
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Old 12-02-2009, 09:58 AM   #4
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Thanks guys!

Al, just to make sure I got this right - you save the bill and the actual proof of payment for the said bill. I am assuming IRS is the only party who would ever care about this (as opposed to the HSA administrator).

REW, I will take a closer look at the link, lots of good stuff in there. I am sure this is not news to you, but at 65 you can also withdraw funds penalty free for any reason (although income tax will be due for non-med withdrawals).
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Old 12-02-2009, 10:55 AM   #5
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Originally Posted by lucija View Post
I am sure this is not news to you, but at 65 you can also withdraw funds penalty free for any reason (although income tax will be due for non-med withdrawals).
Yep, but my goal is to use the funds in such a way that I avoid paying both penalties and taxes on them. Shouldn't be a problem I'm thinking.

All my HSA administrator wants to know is "how much do you want" when withdrawing funds. Their attitude is whether or not the expense is qualified is between me and the IRS. I imagine others are similar.
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Old 12-02-2009, 11:09 AM   #6
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Quote:
Originally Posted by lucija View Post
...........I am assuming IRS is the only party who would ever care about this (as opposed to the HSA administrator)..................
In my experience it depends on the HSA administrator. My first HSA administrator was a real PITA - constantly rejecting documentation, getting confused with running summary type of recipients, just plain goofing up. My current administrator just handles the cash, I do all the documentation similar to Al.
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Old 12-02-2009, 02:52 PM   #7
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... but at 65 you can also withdraw funds penalty free for any reason (although income tax will be due for non-med withdrawals).
If you don't spend it for medical, this has all of the benefits of an IRA only better. Deposits are state tax free in PA. After 65+ withdrawls for non-medical are state tax free in PA. Usually everything in PA is taxed.

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Old 12-02-2009, 05:37 PM   #8
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Quote:
Al, just to make sure I got this right - you save the bill and the actual proof of payment for the said bill.
Usually just one of those. I figure that just a bill is sufficient proof.
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Old 12-03-2009, 06:17 AM   #9
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I use a debit type card for all HSA expenses and the bank sends me a list of those expenditures at the end of the year. I also keep a copy of the reciepts in folders by year.
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Old 12-03-2009, 06:20 AM   #10
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I use a debit type card for all HSA expenses and the bank sends me a list of those expenditures at the end of the year. I also keep a copy of the reciepts in folders by year.
If I planned to actually use my HSA funds rather than save them as another tax advantaged retirement account, this would be the way I would go.
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Old 12-04-2009, 09:23 PM   #11
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We love our HSA but we have only withdrawn money two years. Both times it was for surgeries and we pay our doctor visits out of wallet. We keep our receipts for everything for the chance of us hitting our deductible. We found it to be a pain to use stuff that dose not get clamed thought our insurance for our deductible, but we don’t spend much on over the counter stuff and what not.
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