HSAs: Three Ways to Win. Major Benefits of an HSA A tax-advantaged way to manage your healthcare...
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Transcript of HSAs: Three Ways to Win. Major Benefits of an HSA A tax-advantaged way to manage your healthcare...
HSAs: Three Ways to Win
Major Benefits of an HSA
A tax-advantaged way to manage your healthcare costs
Increased choice over who you pay & how you pay for your services
A tax efficient tool for retirement savings
HSAs: The Brilliant Basics
You own the account - account is ‘portable’
No ‘use it or lose it’ provision
Employees can choose their healthcare
professionals (including out-of-network)
The Brilliant Basics - continued
Save with lower health insurance premiums
Employees can manage their medical expenses
more efficiently
Plan ahead & save for large medical expenses
No time limit to reimburse yourself for eligible
expenses
Tax-Advantaged Savings Vehicle
Pre-tax
Post-tax cash contributions
HSA Contributions can come
from both the employer and
employee/individual
Tax-free interest or
investment earnings
More Tax Advantages
Tax-free distributions
Contributions can be made until April
15 of following year (for prior plan
year)
Additional ‘catch-up’ contributions can
be made by individuals aged 55 or
older (until they enroll in Medicare)
No income limits to contribute
Benefits for Participants with High Healthcare Expenses
Optimize your HSA account benefits with pre-tax contributions.
Plan ahead when you anticipate a large expense such as, surgical procedures or expensive medicines
Enjoy HSA tax-free earnings and withdrawals, and reimburse yourself at any time
Benefits for Medium HSA Users
Manage your medical costs more efficiently (use HSA debit card for co-pays, prescriptions; maximize deductible at year-end)
Plan ahead for large medical expenses in future years with pre-tax contributions and enjoy tax-free earnings
Can make prior year contributions until April 15 of following year & reimburse at any time
Advantages for Occasional HSA Account Users
Enjoy tax-free earnings on the portion of your account that you don’t currently need
Ability to plan ahead & save for future healthcare expenses with pre-tax contributions
Take your account with you when you retire or change employers
No time limit to reimburse yourself from HSA, even in retirement or if unemployed
Allowable HSA Expenditures
Doctor’s office visits (deductibles/coinsurance) Lab fees Prescription drugs (incl. prescribed vitamins) Acupuncture; Chiropractic services Dental care, including braces Hearing aids Prescription eyeglasses; LASIK surgery Smoking Cessation & Weight loss programs
See complete list in IRS Publication 502
Basics of Cash Flow Benefit
Pay yourself first
Make ‘catch-up’ contribution if 55 or older
Plan ahead for large expenses
Can ‘back-load’
Managing Cash Flow Impact
Unused contributions can be invested and accumulate tax-free (like an IRA)
If cash flow is tight, estimate the amount of out-of-pocket costs that need to be covered and contribute accordingly
If you underestimate your expenses, you have until April 15 of the following year to fund H A S
Can reimburse eligible expenses at any time
Nuts and Bolts of HSA Savings
Bring HSA debit/credit card to doctor appointments (pay co-pays) & when filling prescriptions
Keep track of receipts, distributions & record qualified expenses on a worksheet
Maximize deductible Make doctor & dentist appointments
(especially out-of-network) Fill prescriptions Make eligible purchases