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Hsa Insurance Plans Question & Answers

2013 October 25
by Sarah Fields

David asks…

Does the IRS know if I have a HSA eligible health insurance plan?

I’m not talking about the HSA itself. Basically, do health insurers report anything to the IRS. Anyone can open a HSA with a financial institution at any time. Will the IRS know if someone opens a HSA and they DON’T have a health insurance plan?

Sarah Fields answers:

Yes, they will.

Paul asks…

How much should I fund in my HSA account?

I am a young and new working professional with high-deductible insurance and about $400 in my HSA. The max-deductible for my insurance plan is $1500 annually. I’m just wondering how much I should fund in my HSA account, without going overboard. Intuitively, it’d make sense to fund it up to my deductible of $1500 and delay more contributions until I use some, but are there other theories on the optimal amount?

Any thoughts are welcome!

Sarah Fields answers:

You’ll want to fund the account to the $1500 as soon as possible. Thereafter, you’ll want to fund the account as much as you can afford. Remember, the money goes into the account pre-tax, the funds receive interest tax-deferred, and comes out for anything medical tax free. The funds you don’t use roll over year after year, so you’ll have a nice nest egg in the future.

You can also use the funds for things your insurance may not cover. Generally, you can use the funds for anything that the IRS states can be deducted from your taxes; see the IRS publication http://www.irs.gov/pub/irs-pdf/p502.pdf for more info.

Mary asks…

Can an employer force employees to open HSA accounts?

So, employer cancels previous insurance plans this year in favor of a high deductible plan. However, the employer is also requiring that all employees open an HSA in order to enroll in the plan. Just checking my options.
Yes yes…I know HSAs can save money. However, my monthly payment went down about 4 bucks while my deductible quadrupled. Plus, they don’t make any contributions to it.

Sarah Fields answers:

Yes, but he can’t force you to CONTRIBUTE towards it. Most of the time, the employer is contributing a bit towards it. You CAN add more, but you don’t have to.

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