I used to just pay for health expenses out of pocket and use the HSA for savings. Then I decided there was no way I was going to be able to hold onto receipts for decades to remember my medical expenses, if I wanted to withdraw tax free based on those expenses later on, and I also assumed there was a good chance the tax rules would change eventually and it wasn’t worth betting on. Generally just seems like I hassle so I decided to start reimbursing myself as I incurred expenses.
My HSA provider doesn’t seem to require receipts currently, but I just upload them for my own peace of mind. I also would be more paranoid about it if I were reimbursing myself for 10+ year old expenses.
That said, most years I have very small medical expenses so the difference is hardly material anyway. The vast majority of the HSA is being invested.
Yeah, reimbursements are tedious. But paying with the HSA card at the point of sale is exactly as easy/difficult as paying with my AmEx. I just don’t get the miles.
If I wanted to cheap out I could pay with the AmEx and get the miles and then reimburse myself. But that’s too much hassle.
I think ours has the link, but we use an out-of-network provider that doesn’t bill insurance so those expenses were never on the list, so fat lot of good it did.
What if Medicare becomes free at some point? Then what will you do with your HSA?
Also, if you die with funds in your HSA it becomes taxable income to your beneficiary if that beneficiary is not your spouse.
They do have a window where they can reimburse themselves for your expenses, so if they can find your receipts and understand your accounting and get through it then they can avoid the taxes. But otherwise it’s worse than an IRA/retirement account for your beneficiary.
If you die with $400,000 in your account (let’s say you get hit by a bus on your way to your retirement party so no medical expenses since you were killed outright) and they can find medical receipts totaling $20,000 which they submit… they get to tack an extra $380,000 of income onto their actual income the year you die and calculate their income tax accordingly.
If you set up a trust I think you might get better tax treatment, but I’m honestly not sure how that works.
Medicare might be free if they bump up the tax a significant amount. I don’t think any politician in their right mind would try to pull that one on the American public. With the way things have been, Medicare premiums have gone up every year without fail.
$380k pre-tax is still pretty nice, I doubt whoever inherits that would complain and I doubt I could have accumulated that type of $$$ in my HSA without decades of tax free growth.
I am okay with paying my fair share, once I am dead that is.
OK, since I’m now not planning to retire in the US (or be living here 18 months from now), I’m planning to empty out the HSA before I leave. I have 7 years of old statements that I can just request reimbursement on, right? (I started with the HSA 1/1/2015, and have 201 outstanding claims that I can submit on their website.)
My wife’s family is in Montreal, but going with Ontario for English school. La belle province will likely be the ultimate destination once the kids are moved on.
I wonder: could an HSA be used to pay for an international health insurance plan?
(I know there’s a delay in getting access to Canadian Medicare for folks moving to Canada…if it’s even possible for someone retiring to Canada to access such. I’m guessing you’ll be going the “flagpole the border every 6 months” route?)
There is a 3 month waiting period where I have to essentially pay a premium to get healthcare, then medicare will kick in. Not too worried about that. And no, I’m planning on a permanent move to Canada and not coming back to the US much at all.
Why? That money is yours forever. Not as if it is an HRA which has to used or losed by the end of the year.
And, why were you NOT using your HSA for those medical/dental/other reimbursements? I have separate debit card connected to my HSA, and I use it for medical expenses on-the-spot.
Then again, I could be completely wrong about this.
I’ve looked at moving up before, but I don’t have family ties, and at my age it’s far from certain I could get the points to qualify for PR without some extra connection.
I might double-check that in a couple of years, depending on how the US political situation and family concerns develop.