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Hsa Insurance Rules Question & Answers

2015 June 12
by Sarah Fields

Sharon asks…

I want to offer my employees some healthcare benefits besides health insurance…what are my options?

Ideally, I would like to offer a “bank” of $1000 for each employee. This money can be used for doctor visits, dental care, gym memberships, vitamins, prescriptions, etc.

Am I allowed to do this, or is there a specific program or plan that I must follow?

Any information is greatly appreciated!

Sarah Fields answers:

Yes, you are allowed to do this and yes, there are specific rules and regulations. Depending on your health plan you can set up an HSA, MSA, HRA, or FSA, among other less used plans. Here is the IRS publication with more information and links to more details about each type: http://www.irs.gov/pub/irs-pdf/p969.pdf

Paul asks…

Why do we forfeit unused funds in our “flex” spending accounts? Is it not our money?

Flex spending accounts are used to collect funds to be spent on medical bills. They save us from paying some income tax. However, if left unspent, the funds are lost. Why? Who should claim this money if I put it there?

Sarah Fields answers:

You’ve gotten the right answer already – “because that’s the rule”. But, there is an interesting parallel program in health insurance called an HSA plan.

With an HSA plan, you set aside money in addition to the premiums you pay. That money goes into your personal Health Savings Account (hence, HSA) and stays there until you use it. Like a flex spending plan, you get the tax deduction when you put the money in. UNLIKE the flex account, if you don’t spend it, you KEEP it. It rolls over to next year and then you can also add more. The only “catch” is that you must spend it on health care or you suffer a penalty. If you have consistently put in more than you need, when you turn 65 you can pull the money out for retirement without penalty. To learn about this kind of health insurance and what it might cost for you, go to http://www.wavehelp.com/health-insurance/index.htm and click on through to “Get a Quote”. Then take a look at SaveRight HSA PPO or the more robust OneDeductible PPO.
Best wishes.

Charles asks…

can you pay the deductible of hsa approved insurance with money you saved in the hsa?

the deductible for the hsa approved health insurance is $10,000, once i have $10,000 saved in my hsa, can i use this to pay the deductible? thank you.

Sarah Fields answers:

You can use the HSA to pay for any medical expense that was not covered under your health plan. You don’t have to wait until the HSA gets up to $10,000.

Check your plan documents to find out any rules or limitations to your plan though. Not all plans are exactly the same.

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