Ah yes! Being not remotely close to the cutoff I forgot why it’s triple advantaged. Pull it out before ~65 for medical without penalty or after for anything.
You’re still better off using it for medical expenses (or reimbursing yourself for past medical expenses) after you turn 65 because you do have to pay income tax if you withdraw it for non-medical purposes at any age. Only the 10% penalty goes away at age 65, not the fact that non-medical uses are taxed as ordinary income.
But medical uses are not taxed at all… which is huge.
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as @twig93 clarified it is allowed to be used in my plan for medical IF the deductible has been exhausted.
our family seems to have a high cost Rx administered early january every year. it costs so much that we pay the deductible and the copay takes us to the OOP max on that one thing. Like 5 years in a row. earliest was january 2nd one year.
so my record keeping for the future HSA withdrawal is the same paperwork I used to get the lim-FSA reimbursement. Just the earlier part.
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Yep. My employer communicated our limited purpose FSA as if that were the only way they COULD do it. I learned something new in this thread.
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wsj just happens to have an article on this today…
umm...don't click on the link within...wwnnsnmsnm
The rest of it is just the author trying to get to 1,100 words like the editor told her to, imo.
I realize that this thread is a little stale but I feel that I have a contribution that’s a little different.
Unless I have a sizable expense I save and invest my HSA funds. My plan is to hold about 2 years of max oop in cash and invest the remainder along the same lines as my IRA, mostly in stocks. This approach has a downside in that stocks don’t only go up. This year my invested HSA funds are down around 15% which is in line with the rest of my portfolio.
I’ll be reaching my OOP max in February this year because of my surgery. With a year of bad returns, and some outstanding bills coming my way from the visits leading up to the surgery, it will wipe out my HSA, so I’m thinking I won’t use it and will just pay out of pocket. The timing should line up closely with my year end bonus, which fingers crossed would pay for it even post-tax, unless it’s a REALLY bad year for bonuses, and nothing to indicate that.
I think I will still have another $3k or so to go before the family OOP max is hit, but at least the deductible will be met and most years our family is pretty light on the medical bills, I’m just Humpty Dumpty these last few months.
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I’ll have to hit my OOP max in January for a procedure this year =/
Most years I hit the OOP via stupid loopholes where I basically pay $40, so I can’t be too mad, but the timing is unfortunate. Considered delaying it and saving myself $6,000 but I’ll just pay it this time I think.
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Not all of it. I knew about this part, but a lot of people aren’t aware of it. I’m considering funding some portion, maybe 1-1.5k, for each of the kids into an HSA of their own this coming year. Depending on cash flow, I may even do it twice, the first time for 2022 since they can put in for 2022 until April 15, and the second time for 2023. They can take it off their taxable income, and I can make sure they don’t skip going to the doctor/dentist because they are worried about paying for it. This would be on top of the authorized user CC they each have under my account that they can use for things like this, but, for whatever reason, don’t. Maybe with it being health care dollars in their account, they will be more apt to use it.
Children of parents with HSAs can qualify for their own HSA.
This is a mind-blower: Under current law, children such as recent graduates can fund their own HSA based on their parents’ health coverage.
Say that Jane, age 23, is employed but still has health insurance through her parents’ high-deductible plan with an HSA. (Many children are covered by parental plans until age 26.) If Jane isn’t claimed as a dependent on her parents’ income-tax return, she can put up to $7,750—yes, the family amount—into her own HSA, even if her parents have funded their own. Jane doesn’t have to fund the HSA with her own earnings; someone else could give her the money for it.
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Holy shit.
I assume that loophole will go away before it’s relevant to me, but wow.
I will stash everything I can into that if it’s not closed up.
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I wasn’t aware that there were HDHP plans that had separate OOP max for individuals versus family.
We had that when we weren’t in an HSA eligible insurance plan, but when we switched to an HSA eligible HDHP plan, it just became a single OOP max pool for the whole family. Which is still fine, since our OOP max for the family under the HDHP is lower than the previous plan with the separate deductibles and OOP maxes, and one fill of my spouse’s medication puts us past the deductible and into the coinsurance phase on day 1-7 of the new year each year.
It’s funny we’re a giant group of actuaries (even if many of us might be P&C, Work Comp, CGL), and we’re all learning more about insurance by random internet posts.
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Huh, I thought they all did. If you buy family coverage you’re subject to both. Same idea as the individual & family deductibles.
I can see how my statement wasn’t clear.
I didn’t mean that an individual HDHP plan wouldn’t have a different deductible/OOP max than a family plan.
What I meant was that all of the family HDHP plans I have had do not have a separate lower deductible/OOP max for any individual within the family, it’s just all rolled into “you have a family plan, this is the deductible/OOP max for the family”. It was a big surprise with the first HDHP plan we had since we were used to having individual vs family deductibles and OOP maxes in our prior family non-HDHP non-HSA eligible plans, but each of the subsequent HSA-eligible HDHP ones (at different companies) have all worked the same.
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Yeah, our family deductible is $6k, individual OOP maxes within our family are $8.7k, and family OOP max is $12.4k. Next year, the indv OOP maxes are increasing to $9.1k, no change to family max.
We have another high deductible option with higher premiums. That one has a deductible in 2023 of $3.5k, indv OOP max of $9.1k (same as cheaper plan), and family OOP max of $11.6k.
I’ve built out a model to try to find a situation where the more expensive plan is cost-effective, and I can’t find one. I assume the actuaries who priced that have to know that, right?
The premium is $2,080 more a year for the lower deductible/lower OOP max plan.
If the claims are between $3,500 and $6,000, you’re paying 20% of that difference under the more expensive plan, and 100% under the cheaper plan, so the biggest gap there is $2,000. The individual member OOP is the same between the two plans, and the total OOP max is only $800 cheaper…so yeah, there is no scenario where it’s ever cheaper.
If the premiums were less than $2,000 more annually, that scenario would exist.
Maybe all you’re paying for is a smaller risk of getting a giant bill all at once? Or if you know you’re not working the full year and you’ll have some crazy high bills before you stop paying premiums? idk.
I made a the thread on this once…either here or the AO…I’ll see if I can find it.
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I’m a few years away from not claiming my kids as dependents but I’ll keep this on my radar when the time comes.
Found it…
Now, I’m not saying it’s useful to this discussion…I’m just saying “Found it…”
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Healthcare’s fucked so much it’s hard to actually know.
Basically, if you’re healthy take HDHP and max HSA. Lucky you! Hopefully at least.
If you’re very unhealthy take LDHP and an FSA to an amount you’ll use. Don’t let it expire.
Middle ground, confusing. Good luck!
Got weird health & insurance situations like me? Welcome to hours and hours of research and phone calls and miscoded bills.
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