HSA withdrawal

[ripper1]

I have a Fidelity HSA. I haven't called customer service yet but was wondering does anybody have an HSA from there and how do you make a withdrawal to make a medical payment? Thanks

 

[ripper1]

Can I just transfer the amount needed for medical bill to my bank account and then write check to hospital? I just saw that I will receive a 1099-SA form for the amount withdrawn.

 

[Rianne]

I don't have an HSA with Fidelity but I w/d automatically into my checking account. I always pay medical bills myself w/ CC. Then, reimburse myself to my checking account. That way, I get the points on the CC. I can also make sure I'm paying the right doctor/hospital/lab. I'd rather correct any mistakes with CC than messing with HSA. I always double check, date, amount, and make notes in the HSA account.

 

[Senator]

Can I just transfer the amount needed for medical bill to my bank account and then write check to hospital? I just saw that I will receive a 1099-SA form for the amount withdrawn.

Yes.

Based on other withdrawals I have made from an HSA, you keep the documentation. If you ever get audited, you need to prove to the IRS that it was for the correct purpose. It is on the honor system.

An HSA is not an Healthcare Reimbursement plan.

 

[Aerides]

Can I just transfer the amount needed for medical bill to my bank account and then write check to hospital? I just saw that I will receive a 1099-SA form for the amount withdrawn.

This is how I always manage it. I make the payments out of pocket (use a credit card for cash back/points where you can), then reimburse myself by requesting it and having my checking account linked. I haven't done this with Fidelity yet, but assume they all work kind of the same way.

 

[blueskyk]

I have an HSA with Bank of America and use the debit card for the account to pay medical expenses. If I get a discount for cash, I write a check and then transfer that amount form HSA to linked personal checking account.

 

[bingybear]

This is how I always manage it. I make the payments out of pocket (use a credit card for cash back/points where you can), then reimburse myself by requesting it and having my checking account linked. I haven't done this with Fidelity yet, but assume they all work kind of the same way.

Aerides, I'm not indicating your method is wrong, but just offering the way I handle it as it is a little different. I just pay it out of my taxable assets an leave my hsa invested. I keep a record of medical expenses after the first hsa was started and what expenses were used for tax deduction. So far I have not used my hsa to pay for medical expenses. My plan is to use the has to help with medical/LTC expenses later in life. However I can claim past expenses that have not been used for deductions, were after the first hsa and were not already used for medical expenses. This is kind of like a healthcare roth

 

[Aerides]

Yes that's fine too. You can technically leave your HSA funds where they are and reimburse yourself years later - as long as you keep the records - the eligibility of using the funds doesn't have an expiry date.

I have two HSA accounts - one from working and one from retirement that I use each year to help manage my magi.

My old HSA isn't huge, and it has a small monthly fee, so I'm interested in drawing that down as I build up my post-retirement new one with Fido.

 

[Bir48die]

I requested a Fidelity HSA credit card. Easy as can be.

 

[REWahoo]

Out of curiosity, anyone have any first hand knowledge of anyone getting in hot water with the IRS over HSA withdrawals? I've reimbursed myself annually over the past decade for our LTC insurance premiums so never worried about being able to clearly show the HSA withdrawal was for eligible expenses. But I've always wondered if anyone, maybe someone who suddenly withdrew a large sum, ever got audited as a result?

 

[BrianB]

Fidelity will send you a checkbook for your HSA at no cost. I write a check to myself for whatever expenses we want to have reimbursed and photo-deposit it to our Cash Management Account. I keep the check with copies of the payment receipts in our current year tax file. Old fashioned I know, but I still like having a paper trail.

In the past four years we have never had to provide proof, but the receipts and matching check should be sufficient if we're asked for it.

Brian

 

[audreyh1]

They let you request a debit card - that’s another option.

I’ll probably request a checkbook. But most of my expenses will be paid via bill pay from my HSA account. In particular Medicare premiums auto paid monthly. That also has an advantage of record keeping within the one account showing medical providers.

 

[Bir48die]

Out of curiosity, anyone have any first hand knowledge of anyone getting in hot water with the IRS over HSA withdrawals? I've reimbursed myself annually over the past decade for our LTC insurance premiums so never worried about being able to clearly show the HSA withdrawal was for eligible expenses. But I've always wondered if anyone, maybe someone who suddenly withdrew a large sum, ever got audited as a result?

In regards to withdrawals, you’re pretty much on the honor system if you’re not using a debit card. Contributions are reported via form 8889. I’m not sure what would trigger an audit but it’s my guess where your spending is significantly higher than deposits and you haven’t reached 65. As long as you have backup your golden.

 

[RobbieB]

I'm with HSA bank and use the card. When I check the activity the payee (doctor or dentist or pharmacy) is right there. I don't keep records.

 

[travelover]

Out of curiosity, anyone have any first hand knowledge of anyone getting in hot water with the IRS over HSA withdrawals? I've reimbursed myself annually over the past decade for our LTC insurance premiums so never worried about being able to clearly show the HSA withdrawal was for eligible expenses. But I've always wondered if anyone, maybe someone who suddenly withdrew a large sum, ever got audited as a result?

I've never heard of anyone being audited. My previous employer sponsored HSA provider nanny-ed me to death for proof on every withdrawal. Since I left them, I've had three different HSA providers and they leave it up to me to document what the money was spent on.

 

[Smitty700]

I've never heard of anyone being audited..

I would guess it's a matter if the amounts taken out raise the flags. I have accumulated $40,000 in medical expenses over many years that I can draw from my HSA at any time. If I withdraw all of that all in one year, I imagine that I'll need to be ready for the IRS to ask questions.

 

[Senator]

I would guess it's a matter if the amounts taken out raise the flags. I have accumulated $40,000 in medical expenses over many years that I can draw from my HSA at any time. If I withdraw all of that all in one year, I imagine that I'll need to be ready for the IRS to ask questions.

Maybe. Abut 30 years ago I reported my employer to the IRS for failing to pay SS taxes. They asked me if it was over $25K in taxes. Since it was not, he said they were not too worried about it.

From what I hear, they are even less concerned. They need to justify the hours spent compared to the money taken in.

 

[swakyaby]

Fidelity issued me a HSA debit card upon my request. It seems like the easiest way to take withdrawals from the HSA with minimal record-keeping.

 

[GoodWishes]

Fidelity issued me a HSA debit card upon my request. It seems like the easiest way to take withdrawals from the HSA with minimal record-keeping.

+1

Use the Fidelity HSA card for all medical expanses. The card tracks all payees and amounts so minimal record keeping needed. Also if I use HSA card at places like CVS, it is smart enough to only charge allowed expenses on HSA card. Then I need to pay the rest separately. So I don't need to figure out myself what is allowed since HSA can be used on many over the counter things.

 

[RunningBum]

I would guess it's a matter if the amounts taken out raise the flags. I have accumulated $40,000 in medical expenses over many years that I can draw from my HSA at any time. If I withdraw all of that all in one year, I imagine that I'll need to be ready for the IRS to ask questions.

I have a little more than that, and have been saving medical receipts. I probably won't take it all in one year, but it's possible. If they do ask questions, I'm ready. I have a spreadsheet and all receipts.