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We Opened an HSA

August 25th, 2011 at 06:52 pm

And that's an hour of our lives we'll never get back. My gosh, the rules are stupid for an HSA account. Since the insurance is through DH, even though it is a family plan, only DH can withdraw funds for it. Only his name can be on the account. No spouse or co-signer can be on it. I can, however, deposit funds and be a beneficiary. Gee, IRS, do you not think a spouse might need access to this account?

And since the account can be accessed online and transfers can be made online, and they don't know who is in front of the computer screen, I can technically still access the account and be the one who moves the money around with DH's account number and password. Can you say giant loophole?

We set up an HSA savings account only since if we had done an HSA checking account or debit card, only DH would have been able to use it. Since he is in Alaska 3 weeks out of 6 it would be very inconvenient to have to wait to pay medical bills until he was home.

So we transferred the money I had saved to pay Virginia Mason into the HSA savings account and then we will transfer it back to our personal checking account so that I can still be the one to write out the bills. We just have to keep a carbon copy of each check and keep a copy of each medical bill that is paid. I will set up a folder to keep these in.

The lady setting up the account said that we could also do it retroactively on medical bills we have already paid this year, but that we would have to consult our tax adviser to learn how, because she only knew we could, not how. Umm...we don't have a tax adviser. We've never itemized because it has never been worth more than the standard deduction and it's a waste of money to have a tax adviser do your taxes in that case. So I guess that's going to be a lot of boring reading to figure it out on the IRS website.

I have all of the medical bills, or at least the portion we keep from this year, and I think I have all of the check carbons, too, so it'll just mean transferring some money back and forth and figuring out how to do the rest of it. I really wish we'd gotten around to doing this in March instead of waiting until now. Ah, procrastination.

2 Responses to “We Opened an HSA”

  1. MonkeyMama Says:

    You can take money out of HSA for any medical bills for the year. Should be.

    There is just an annual dollar limit to contribute money. & it is complicated because I believe you can only put in a fraction of the year from when you opened the HSA (5/12 of the max? If opened by September 1?). But I remember there was some complicated exception.

    I don't deal with HSAs much because they really suck in California (huge state tax issues here).

    (I totally manage all the money in our house - I manage dh's IRAs online, and am applying for credit cards in his name all over the place. Thank goodness for the internet!)

  2. MonkeyMama Says:

    Contribution limit $6150 in 2011 (For family).

    "You can also contribute up to the maximum amount, even if you enroll in the HSA mid-year, as long as you maintain your HDHP eligibility for a 12-month period. Otherwise, your contributions are included in gross income and you are subject to an additional 20% excise tax. Note - the 12-month period starts with the last month of the taxable year in which you enrolled in the HDHP. For example, if you enroll in June 2011, you must be eligible from December 2011 - December 2012."

    So, you can contribute the max for 2011, but be dang sure you will stay in the HSA plan until the end of 2012! (20% penalty is steep!)

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