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Best Health Savings Account Plans Question & Answers

2014 February 16
by Sarah Fields

Linda asks…

What happens to the money in a health care savings account when you are no longer eligible?

I am changing jobs and this employer offers a HSA option that I find attractive. I like the concept but I’m concerned about what happens if I leave that employer down the road and the new employer does not offer a high deductible policy (i.e. I’m no longer eligible for the plan). I could always buy a policy myself above and beyond the HSA amount but I will likely prefer to handle this through my employer. Any info?

Sarah Fields answers:

It sits in the HSA. You can still spend it on health care items, you just can’t add to it. (If you just take the money out before 65, it reverts to income and you owe a 10% penalty on it.)

Ruth asks…

High deductible health plan too good to be true?

My fiance is on a HDHP with a health savings plan which her job deposits 1500 per calender year. Her deductible is 2000 with an out of pocket maximum of 4000. So say she goes the next three years using none of the money in the savings plan. That would take it to 3500. Now almost wouldnt this be free healthcare for the rest of her life if nothing major happened?

Sarah Fields answers:

It is really up to the exployer to pay those expenses. If they choose to put money into an account to cover the high deductibles that is thier choice. (Usually the company gets a tax break for it) As far as free for life… Her max out of pocket is 4000 plus the 2000 deductible .. So 6000 is technically the max out of pocket PER YEAR.. You’d be suprised how quickly you can burn though that money if something major happens…

Charles asks…

Can I use the MSA distribution to pay for non-reimbursement medical expenses under the PPO coverage ?

I have a Medical Savings Account (MSA), from previous employment, but no longer have High Deductible Health Plan (HDHP) coverage. I now have PPO coverage.

Sarah Fields answers:

Yes. You can’t add to it, but you can use it for deductibles, copays, etc…


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