What types of insurance and other coverage can I have and still be eligible to take advantage of an HSA?
Permitted insurance includes workers’ compensation, property insurance, insurance for specific disease, such as cancer coverage and insurance that pays a fixed amount per day of hospitalization. Coverage for dental, vision, long-term care, accidents and disability are also permitted.
No. You are not required to open an HSA.
The money in the HSA is yours and will go with you. If you join another employer that also offers a Consumer Driven Health Plan, you can continue to contribute to your HSA. You can leave the HSA with your current administrator, or you can choose to roll it over to a new administrator. If your new employer does not offer a Consumer Driven Health Plan, you can no longer make contributions to the HSA. However, you can still withdraw funds from the HSA or leave the funds in your HSA to earn interest.
Generally, you cannot use your HSA account to pay premiums for health insurance coverage. Exceptions include COBRA premiums, long-term care premiums, Medicare Advantage premiums or premium payments that allow you to retain health coverage while you are receiving unemployment compensation.
Qualified medical expenses are typically covered by a health care plan, such as office visits, emergency room services and hospitalization. Qualified medical expenses also include prescription drugs and many over-the-counter drugs, vision expenses including eyeglasses and contact lenses, medical plan deductibles and co-pays, as well as non-cosmetic dental expenses. The covered items are defined by IRS code 213 (d) and are listed in IRS Publication 502.
You will need to include that amount in your gross income when you file your taxes. It will be treated as regular income, and if you are less than age 65, it will be subject to a 10% excise tax.
Can I change investment funds, or will I need to keep my money in the same fund until it is withdrawn?
This may vary based on who has been chosen as the qualified trustee for your HSA. Contact your HSA administrator for more information.
It depends on whether you are enrolled in a general or a limited FSA.
If you are enrolled in a general FSA that provides reimbursement for all medical expenses, you would be ineligible to make contributions to an HSA.
If you are enrolled in a limited FSA that only provides coverage for vision and/or dental, you would still be able to make contributions to an HSA.
FSA Grace Period – If you enroll in a Consumer Driven Health Plan while still covered under the grace period of an FSA, you will still qualify for an HSA if the balance in your FSA is zero, or if the year-end balance in the FSA is transferred directly to the HSA.
Yes. A one-time rollover from an IRA to an HSA can be made without being subject to a tax or penalty. The transfer amount is limited to the maximum HSA contribution for that year. For detailed assistance it is suggested that you contact your tax advisor and your HSA administrator.