It’s probably easier to submit the claims while you still have an online account through your employer. They might start charging a hefty monthly fee if you’re no longer with the employer that you had the account through. I got dinged on that once. Technically you can sit on it forever, but that doesn’t seem like the greatest idea to me.
Expect it to take a while for them to process everything. If your claims exceed your account balance, sort them by size and submit the largest ones that sum up to your account balance. (Approximately, anyway. Don’t bother with the $4 generic prescriptions unless you need them to get up to your account balance. It’s less work for you AND them if you submit fewer claims. Of course if you need them all, then you need them all.)
My outstanding claims is within $500 of my account balance right now, but I’ll submit them in batches over the next few months, starting with the largest.
Advantage of holding onto the money in an HSA and waiting to submit receipts for reimbursement: tax free investment earnings
Disadvantages of holding onto the money in an HSA and waiting to submit receipts for reimbursement: hassle of holding onto the receipts in an organized fashion, risk of losing receipts / receipts destroyed in a casualty loss, possible high fees starting when you leave your employer, possible problem with getting reimbursed for decades-old expenses (like they require additional documentation that is no longer available).
To me the disadvantages outweigh the advantage. But if you don’t mind the hassle and you assume that you will actually be able to get reimbursed then the math does come down on the side of holding onto receipts for reimbursement in (possibly an early) retirement.
What my BIL is doing is letting his HSA grow with the market… kind of like a secondary retirement account. Then, when he wants to make withdrawals, he’ll claim his reimbursements.
I was planning to use it for retirement medical expenses, but since I’m moving to a country that doesn’t make people pay for healthcare*, I figured I’d just reimburse all the past expenses and cash it out. Just waiting for them to approve the link to my bank account so I don’t have to deposit a couple of hundred checks.
Pay medical bills with credit card over the years (earn miles while you’re at it).
The HSA is essentially an ATM with the amount you’ve spent in medical bills as the balance, but the amount grows with the market and is never taxed.
Retire and use your “ATM” whenever you want, just save your medical receipts.
Use the rest of the money in the account for actual medical bills.
Over a 20 year period of maxing out a single account, assuming a 7.5% annual return, you’d have around $100k in tax free earnings in your HSA. If you are going to put $$ into a taxable brokerage account anyway, might as well max out an HSA before you do that. Pay your credit card medical bill with the money you’d put into the brokerage.
Yes but there’s no time limit on how long you have to reimburse yourself.
So say you have surgery today and your cost-sharing on the surgery is $4,000. You also happen to have $4,000 in your HSA. You also want to retire someday.
Option 1: Use the HSA to pay for your surgery now. Save for retirement separately.
Option 2: Pay for the $4,000 out of pocket now. Leave the $4,000 in the HSA. Hold onto your receipt. When you retire and need money the $4,000 has grown to $5,000. Withdraw $4,000 tax-free and penalty-free as reimbursement for the surgery you had umpteen years ago. You have $1,000 leftover that you can use to pay for retirement medical expenses.
If you’ve already maxed out your IRA & 401k contributions then this helps get you some tax-free investment growth.
No, medicare is available to permanent residents after 3-6 months, depending on the province, plus citizens. Looks to be 5 months (153 days, technically) in Ontario, with a small private insurance premium to pay to cover that period.