Q. Can a Medical Savings Account be rolled into a Health
Savings Account?
A. Yes. MSAs can be rolled into HSAs on a tax-free basis, but
it is not necessary. If, however, you choose to participate in the
new HSA contribution limits and deductibles at this time, complete
an HSA Adoption Agreement.
Q. Does the maximum Out-Of-Pocket expense of $5,500 for
individuals and $11,000 for families include the deductible?
A. Yes. For 2007 the total OOP expenses including the deductible can be no
greater than $5,500 for an individual and $11,000 for a family.
Q. What happens under the HSA law once someone becomes eligible
for Medicare?
A. Once a person becomes Medicare eligible, he/she can no
longer contribute to an HSA. However, he/she can use the
accumulated funds to cover qualified medical expenses not covered
under Medicare or his/her supplemental plan.
Q. Since deposits can be made by anyone on behalf of the
account beneficiary, who can legally take the tax deduction?
A. Contributions made by a family member on behalf of an
eligible individual to an HSA are deductible by the eligible
individual in computing adjusted gross income.
Q. Are health insurance premiums considered a qualified medical
expense?
A. No, health insurance premiums are not qualified eligible
expenses except for the following scenarios: qualified long term
care insurance, COBRA and health care coverage while receiving
unemployment compensation. Funds can also be used to pay for
Medicare Part A or B premiums, but not Medicare supplement
premiums.
Q. Who can deduct premium payments from their taxes?
A. Today, the self-employed can deduct their premiums. We are
hoping Congress will pass legislation that will allow everyone
to deduct 100% of their premium payments. Until such legislation
is passed, only the self-employed can their premium payments.
Q. If a client files an extension on his/her taxes, would
he/she have extra time to contribute money into his/her HSA
custodial account?
A. The client could contribute until the tax filing deadline.
An extension does not affect the amount that a client can
contribute to the HSA.
Q. How much can a client contribute to an HSA account if he/she
changes the plan deductible mid-year?
A. If a person changes his/her deductible mid-year, his/her
contribution will be pro-rated based on the new deductible. For
example, if you change the deductible from $2,000 to
$5,000 in June, his/her contribution is 6/12 of $2,000 ($1,000)
plus 6/12 of $5,000 ($2,500), for a total of $3,500 for the year.
Q. Can clients roll funds from an HRA, FSA or IRA into an HSA?
A. Starting in 2007, accountholders may make a one time
transfer from FSA's and HRA's into an HSA as long as 1) the
transfer occurs before January 1, 2012, and 2) the amount
transferred is no more than the FSA or HRA balance on September
21, 2006. Accountholders may make a one-time transfer
from IRA's into an HSA - the amount transferred is subject to the
annual contribution allowance, and the accountholder must remain
HSA eligible for at least 12 months.
Q. Can clients roll funds from an HSA into another investment
vehicle, such as an IRA, HRA or FSA?
A. No, not for HRA's or IRA's. Account holders may make
HSA contributions even while in an FSA grace period if 1) there is
no money remaining in the FSA, or 2) the FSA funds are transferred
into the HSA subject to the FSA- transfer guidelines shown
above.
Q: If an unmarried insured has single coverage, can HSA funds
be used to pay for qualified medical expenses for his/her
dependents?
A. Yes.
Q. Can minors have a “self-only” HSA?
A. According to the Treasury guidance, minors who are claimed
as a dependent on another person’s tax return are not eligible
to have a “self-only” HSA. They can be covered by their
parent’s or guardian’s HSA plan.
Q. Does a person buying an HSA need to have “earned” income
in order to deduct the contribution? Can they deduct it against
“unearned” income i.e. pension, investment, etc.
A. An individual who has less earned income (even no earned
income) than his/her HSA contribution may still take the full
above-the-line deduction.
Q. How to Find the Best HSA Qualified Health Plan
A. No one insurance company is the best in all situations.
Things like age, zip code, tobacco use and health history will
influence which plan will be best for your specific needs.
We
will review HSA qualified plans
from Colorado's top companies including Anthem Blue Cross Blue Shield,
Humana, Aetna, Assurant Health, American Medical
Security and UnitedHealthcare Golden Rule and more to help you find the
best value on the right health plan. Get
a free personalized quote on an HSA qualified health plan.
MORE HSA LEARNING RESOURCES >
HSA OVERVIEW
HSA QUALIFIED HEALTH PLANS
HSA BANKING OPTIONS
HSA MULTIMEDIA TUTORIAL
HSA QUALIFIED EXPENSES
HSA QUESTIONS AND ANSWERS
GET A QUOTE ON AN HSA QUALIFIED HEALTH PLAN
Health Savings Accounts are the biggest advancement in health care financing in years is
available to anyone in Colorado with our HSA qualifying high-deductible
medical plans! Call Colorado Health Insurance Brokers at 800-416-4481 for more information and a free quote or Get
a free instant HSA quote.
New - Visit the US
Department of the Treasury FAQ for more info.
* See IRS Publication 502
for a list of qualifying medical expenses. You may also reference
the IRS
HSA Questions and Answers bulletin and www.irs.gov
for more information on HSA's and IRS rulings and www.ustreas.gov
for Treasury Department rulings. Colorado Health Insurance
Brokers are not engaged in rendering tax, investment or legal
advice. Federal and state regulations are subject to change. If tax,
investment or legal advice is required, seek the services of a
licensed professional. All terms and conditions of
insurance coverage, including benefits and exclusions, are contained
in the Certificate, which shall control in the event of a conflict
with this overview.
*Plans quoted by Colorado Health Insurance Brokers have the guaranteed
best prices available. Tell
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