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Posted by jIM on February 18, 2008, 12:51 pm
Some questions as to how HSA money can be spent.
Background:
I have an HSA thru work with an HDHP. I sign up for HDHP and my
company puts in $750 into my HSA (regardless of my contribution, so
it's free money). I contribute more (because investment choices have
a $1000 minimum).
I also don't see a doctor very much. Maybe to get a flu shot or
complain about lower back pain or allergies and get a perscription.
My wife uses her health plan at work. Great plan, she is in hospital
now (pregnant with twins, but has some high risk symptoms, so she has
been there for 10 of last 13 days, and won't be leaving anytime
soon). Her health plan has a $100 deductable for the hospital stay,
rest is covered by her insurance (again, this a plan offered by her
employer)
**caveat- my wife works in HR and administers health plans, retirement
plans and does other HR work for a living**
Can my HSA money pay for my wife's medical expenses?
My answer- yes- because an HSA is just a health care tax shelter.
Provided money is spent on eligible medical expenses, it does not
matter which person's name is on the bill (I could actually pay for
you medical care out there on usenet).
Her answer- no- because the HSA is part of my plan and she is not
covered by it.
Anyone care to chime in?
Some references
http://www.irs.gov/publications/p969/index.html
Qualified medical expenses. Qualified medical expenses are those
expenses that would generally qualify for the medical and dental
expenses deduction. These are explained in Publication 502, Medical
and Dental Expenses. Examples include amounts paid for doctors' fees,
prescription and non-prescription medicines, and necessary hospital
services not paid for by insurance. Qualified medical expenses are
those incurred by the following persons.
Yourself and your spouse.
All dependents you claim on your tax return.
Any person you could have claimed as a dependent on your return except
that:
The person filed a joint return,
The person had gross income of $3,300 or more, or
You, or your spouse if filing jointly, could be claimed as a dependent
on someone else's 2006 return.
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Posted by Cal on February 18, 2008, 3:20 pm
> My answer- yes- because an HSA is just a health care tax shelter.
> Provided money is spent on eligible medical expenses, it does not
> matter which person's name is on the bill (I could actually pay for
> you medical care out there on usenet).
>
> Her answer- no- because the HSA is part of my plan and she is not
> covered by it.
>
> Anyone care to chime in?
>
I believe that she is correct.
The reference that you listed "expenses for you or your wife or children"
would only apply IF they were covered under The Plan.
ex:You have a FAMILY plan, have $5,000 accumulated IN TH PLAN
and your daughter incurs $4,000 of uncompensated expenses, and
your son incurs $2,000 of uncompensated expense, YOU have NO EXPENSE.
You could use the entire $5,000 to apply to those expenses.....
Kalman J. Lester CLU
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to keep the conversations on-topic for financial planning. Other posting
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Posted by TB on February 18, 2008, 9:00 pm
jIM wrote:
> I have an HSA thru work with an HDHP.
>
> My wife uses her health plan at work.
>
> Can my HSA money pay for my wife's medical expenses?
Yes, for federal tax purposes paying unreimbursed medical expenses of
spouse/dependents is an allowable use for HSA funds, even if they're not
covered by the HDHP.
The rules were different for MSAs, and if you had an MSA now you
couldn't do this type of distribution in a year you contributed to the
MSA - that makes the distribution taxable. Perhaps she's thinking of the
MSA rules?
-Tad
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