Pay Provider or reimburse yourself from the HSA?

[Markola]

We crave simplicity, so we max out HSA contributions and then pay all medical expenses from it, as-designed, not worrying with points and reimbursements. Hats off to those who do, though. We’ve only had an HSA for 2 years and I aim to accumulate one year of contributions in cash as a cushion ($7,000), then buy a balanced mutual fund with anything above that.

[thefinancebuff]

Quote:

Originally Posted by Rianne Say I get audited and the hospital statement or EOB back up paperwork shows a different amount than what I paid. How do I show the correct amount, what I paid without some backup paperwork?

You are allowed to reimburse yourself less. If the EOB showed you owe $100 and you only reimbursed yourself $85 from the HSA because you didn't feel like asking for the full $100, that's perfectly OK.

[RunningBum]

Quote:

Originally Posted by thefinancebuff You are allowed to reimburse yourself less. If the EOB showed you owe $100 and you only reimbursed yourself $85 from the HSA because you didn't feel like asking for the full $100, that's perfectly OK.

Yeah, that's not the question though. Can you reimburse yourself $100 if the EOB showed $100 but you negotiated it down to $85 with the provider?

[pb4uski]

Quote:

Originally Posted by thefinancebuff You are allowed to reimburse yourself less. If the EOB showed you owe $100 and you only reimbursed yourself $85 from the HSA because you didn't feel like asking for the full $100, that's perfectly OK.

But what it the EOB shows that my responsibility is $100 but I only paid $85 because I called the provider and they offered me a 15% discount if I paid them that day with my credit card?

[Teacher Terry]

With our HSA even though paid directly to the provider they ask for a bill . We never have anything left at the end of the year and the only money in it is provided by our past employer.

[RobbieB]

I pay the provider direct from the HSA VISA card. The bank has all the transactions on file. Doctors, dentists, pharmacies and co-pays. I keep zero receipts.

[pb4uski]

So if sometime along you get audited by the IRS you should home that the bank, doctor's office, dentists, etc still have records. Both the doc and dentist that I have used for most of my adult life have retired and their practices are done, so I would be SOL without my own records.

[RunningBum]

Keeping and organizing receipts is a pretty simple task to let me keep money in a tax free account. One spreadsheet, one shoe box. Last year I decided to back it up by scanning the receipts and keeping a folder on my PC for each year. Still simple.

[thefinancebuff]

Quote:

Originally Posted by RunningBum Yeah, that's not the question though. Can you reimburse yourself $100 if the EOB showed $100 but you negotiated it down to $85 with the provider?

Of course not. You reimburse only the actual expenses.

Quote:

Originally Posted by pb4uski But what it the EOB shows that my responsibility is $100 but I only paid $85 because I called the provider and they offered me a 15% discount if I paid them that day with my credit card?

It doesn't matter why you decided to reimburse yourself less than the amount on the EOB.

[Spanky]

Thanks for all the input. I do not realize that you could negotiate a discount.

[FlaGator]

At the year-end review with my accountant, I asked about a couple of minor things in the interest of "tax hygiene" and future record keeping. He's registered with the IRS, been in the game for decades, has helped people I know through letter inquiries, and plays *everything* by the book.

While not dismissive, he told me the requirements, grinned and said, essentially, the odds of getting audited were less than tiny. He said full audits are now rare, letter inquiries are slightly more common, and quit worrying about it.

Based on that, I'd say let your conscience guide you on the $80 negotiated payment vs. the $100 on the EOB...…..

[Montecfo]

Quote:

Originally Posted by pb4uski But what it the EOB shows that my responsibility is $100 but I only paid $85 because I called the provider and they offered me a 15% discount if I paid them that day with my credit card?

The amount you paid controls. Now could you use the EOB as evidence of a higher "payment" amount. Sure! Would it fly on audit? Unlikely.

[fh2000]

Quote:

Originally Posted by Spanky I am thinking about paying for medical expenses with a credit card to earn rewards and then reimbursing yourself from the HSA. Are there any disadvantages?

I am not clear on the second step.

How do you actually reimburse yourself from HSA account? I have an debit card from HSA account, but not sure how to withdraw cash and put in my pocket. Are you able to write a check or just transfer money from HSA account to your bank account?

[candrew]

Quote:

Originally Posted by audreyh1 For simplicity in reporting/record keeping we plan to pay our Medicare part B and part D premiums as billpay directly from our HSA account. We plan to spend our HSA accounts down before RMD age.

DW started Medicare this month. She is paying Medicare B & D premiums on a quarterly basis using her rewards CC and subsequently reimbursing herself with HSA funds.

In similar fashion, we will spend down our HSA's prior to RMD's.

[candrew]

Quote:

Originally Posted by fh2000 I am not clear on the second step. How do you actually reimburse yourself from HSA account? I have an ATM card from HSA account, but not sure how to withdraw cash and put in my pocket. Are you able to write a check or just transfer money from HSA account to your bank account?

Bolded text above.

[fh2000]

Quote:

Originally Posted by fh2000 I am not clear on the second step. How do you actually reimburse yourself from HSA account? I have an debit card from HSA account, but not sure how to withdraw cash and put in my pocket. Are you able to write a check or just transfer money from HSA account to your bank account?

Never mind. A google search show this is doable:

"Reimburse Yourself for Out-of-Pocket Medical Expenses
Did you know that you can pay yourself back from your HSA for IRS-qualified medical expenses that were paid out of pocket? We offer multiple options for accessing your funds.

HSA Bank Health Benefits Debit Card – You can use your HSA Bank Health Benefits Debit Card at an ATM4 to reimburse yourself for eligible expenses paid out-of-pocket (a transaction fee may apply).

Note: When withdrawing HSA funds from an ATM, be sure to select the "checking" option (not savings) when asked the type of account you are withdrawing from.
Online Transfer – On HSA Bank’s Member Website, you can transfer funds from your HSA to an external bank account, such as a personal checking or savings account. There is a daily transfer limit of $2,500 to safeguard against fraudulent activity.

Checks – Use your HSA Bank checks to reimburse yourself for an IRS-qualified medical expense already incurred. Simply write a check from your HSA to yourself and deposit it into your external personal checking or savings account."

[I am He]

Quote:

Originally Posted by pb4uski No, it sounds smart to me. Also, once you receive the bill, call the provider and ask if they offer an additional discount to you if your pay right then and there by credit card.... I've received 10-15% discounts plus the 2% that I get from the credit card company.

I just played this out myself (much to my surprise). They offered a prompt pay discount if paid in full. Saved about $800 since she maxed out last year.

I'm going to keep the $ in the HSA, hang on to the receipts and someday "cash them out."

[Dave J]

I pay all my medical bills, insurance premiums ect with a 2% cash back credit card. I keep a running total in a folder with receipts by year, and at the end of each year I write a check to myself to reimburse everything I have paid for the year. Reconciling every year end seems to make it easier for me. Been doing this for well over 10 years and it works fine. I always put in max allowed and have not been sick. We have just under 40k in HSA now. Over 65 so can't put new money in, so this will be gone in 10 - 15 years , based on current spending. All tax free!

[Dave J]

Something I found interesting is you can not reimburse yourself for Medicare supplement premiums.But you can for other premiums. So be careful!

From.... https://www.kiplinger.com/article/re...iums-paid.html


Even though you have your Medicare premiums paid directly out of your Social Security benefits, you can withdraw money tax-free from your HSA to reimburse yourself for those expenses. After you turn 65, you can use HSA money tax-free to pay premiums for Medicare parts B and D and Medicare Advantage plans (but not premiums for Medicare supplement policies), in addition to paying for other out-of-pocket medical expenses.
"

[Clone]

Quote:

Originally Posted by pb4uski So if sometime along you get audited by the IRS you should home that the bank, doctor's office, dentists, etc still have records.

We have our HSA with Fidelity. When we pay expenses using the HSA debit card, it creates a record on the statement that shows who was paid and the amount. I think those make for a good enough record.