Will an HSA medical plan cost more than you currently pay for health insurance?

It is extremely unlikely you would see an increase in your monthly premium expense. Because of the unique way in which HSA medical plans are designed, everyone should realize a savings in their monthly premiums. Of course, the amount of savings will vary based upon plan design, age, persons covered and so on. The greatest savings can be realized at the end of the year. Remember, the money leftover in your HSA account at the end of the year is yours to keep.

If I make a contribution to a HSA, does this limit or reduce my ability to contribute to a traditional or Roth IRA, in any way?

No, any contribution to an HSA in no way limits contributions to a Roth IRA or a traditional IRA.

I opened an MSA five years ago. Can I convert this account to a Health Savings Account? Or, apply for a new qualified health insurance plan with an HSA and transfer my current balance to a new company?

You can convert your MSA to a HSA and transfer it to a new company.

How is money withdrawn from the HSA to pay for qualified medical expenses? Are special checks issued for use against the account? Who "allows" or "disallows" any particular medical expense, i.e. do you need to prove that your expense is a valid medical expense?

How you access the funds in your HSA depends on the trustee you use to hold your HSA funds (or the insurer who also administers the account). Some insurers or trustees give the HSA holder a debit card and/or a check book. With regard to some one verifying qualified medical expenses, that person is you. The Treasury Department has ruled that no third party is needed to "approve" your expenditure. In some cases you could purchase an HSA insurance policy that offers a network of physicians who will give you a discounted price. In that case, you would wait to pay your bill until the discounted bill is sent to you. However, if you tell the doctor that you are paying cash and want a discount, you may get one, since the doctor is getting paid today and does not have to file a claim, or fight with the insurance company to get paid.

Can emergency room services for accident and illness be paid before the deductible is met?

From the HSA account yes, by the insurance carrier, before the deductible is met, no. However, many insurers offer to pay the full amount of the anticipated HSA deposit in the first year or two of opening an HSA, to cover an early expenditure should something serious and costly occur.

What is the maximum limit a married couple can deposit to one HSA?

The maximum HSA deposit for a family cannot exceed the deductible, or in the case of a deductible higher than $5,150, the HSA deposit cannot exceed $5,150 in 2004.

I am able to deposit $12,000 in 2004 into my pre-tax (401k) account. Can I still make additional tax free deposits into an HSA?

Deposits into 401k's or Roth or traditional IRAs have no bearing or impact on your eligibility for an HSA. The answer is, yes.

Who manages doctor/hospital fees? What is the recourse of unusually high fees or unreasonable fees? In the past there has always been a discrepancy between health insurance companies and those patients without insurance.

First, you could have an HSA medical plan with a network of doctors to which special discount pricing applies. In addition, your insurer may have agreements with hospitals in place that give the insurer a large and significant discount. Third, some insurers will fight hospitals on behalf of the insured for a price that is reasonable. Fourth, you may be able to negotiate a reasonable price if is non-emergency surgery i.e. quotes for the cost of the birth of a child. Florida just passed a law soon to be signed by the Governor which mandates hospitals post their non-emergency surgery prices and that they give prospective patients an estimate of what the insurance will cover. For several years, hospitals have been criticized about overcharging the uninsured in the press. The U.S. House Commerce Committee and the U.S. House Ways and Means Committee are investigating this issue. Furthermore, the U.S. Senate Committee has jurisdiction on this issue and is in the process of drafting some legislation similar to what passed in Florida. The movement is to stop this practice by hospitals on their own accord, or legislation will stop it.

Where can I find a list that contains the specific items one may pay for through a HSA? e.g. over the counter drugs, orthodontia, lasik eye surgery, flu shots, etc.

An abbreviated list and the link to the IRS Document 502 can be found on this website. In the Menu section go to Medical Expense Guidelines. The list is long, and most things are approved expenses. However, some expenses may not count towards your health insurance deductible; it depends on your health plan.

I have more money in my HSA than the deductible and would like to move it to get a higher yield. Can this be done and will the funds still be available for medical use? What options do I have?

To begin, talk with your current account administrator or find another account administrator who offers various investment options. Keep in mind; funds placed in securities are subject to market fluctuations that could affect account values. As we all know, markets go up and go down, so think through your decision before taking action. Yes, you can move the funds and the account value is still fully available for medical expenditures.

Can IRA and/or 401(k) money be rolled in to an HSA?

No.

With a PPO “network” plan, do the out-of-network expenditures apply to in-network deductible and maximum out of pocket?

Yes, but keep in mind that out-of-network benefits are typically less than in-network benefits. Therefore, the relative percentage would be calculated and credited towards your maximum out of pocket deductible. However, when paying for qualified expenses through the HSA portion of your plan, incurred expenses can be paid from the first dollar of expense regardless if you are in or out of network. The only time the out of network difference comes in to play is if and when you exceed your annual deductible and start using benefits from the insured medical portion of your plan.

If I begin depositing money into my HSA account and then incur a claim that exceeds the amount I have deposited into my account, I understand there are two remedies. Distribute funds from the account to pay as much of the bill as possible and pay the balance with after tax funds, Or, deposit enough funds to pay- up the balance of the annual contribution for that year (or enough to cover the bill) and then once the deposit is made into the HSA account, pay the entire bill (assuming the max contribution is enough to cover the bill) tax free. Is this correct?

Yes, and here is another option. Some insurers who sell HSAs offer a rider that allows those just starting out with an HSA to access the full amount of a year's contribution to the HSA should they need it. The employee or the individual then pays back the amount to the insurer on a month by month basis. Once the employee's or the individual's HSA balance exceeds their deductible, or once they feel they have enough funds in their account, they can elect to drop the rider.

Can a HSA funds be used for lasik surgery to eliminate eye glasses?

Yes

Can HSA funds be used for dependents not covered by medical Insurance?

If you have an HSA and your wife and/or your children are not on the HSA insurance, you can still pay for their health costs out of your HSA account.

My company just installed an HSA plan for the employees. Can I use monies from my HSA account to join Weight Watchers?

Yes.

How are expenses verified to be qualified medical expenses? Are receipts required to be sent to insurance carriers? Are there audits? If I have a debit card linked to HSA funds, where does the burden of proof lay in the event of an audit, with the individual or with the third party debit card provider?

The owner of the HSA account is responsible and accountable to the IRS, in the event of an audit. The insured, once their deductible is reached will provide the expenses to the insurer. The burden of proof lies with the owner of the HSA and not with the entity providing the debit card.

I currently have health insurance offered by my employer. Do I qualify for HSA?

Go to the General Introduction section of this website and click on the menu item “What Type of Health Plans Qualify”. There are specific requirements that must be met.

I already own a high deductible health plan, will the amounts already paid toward my deductible carry forward to help satisfy my deductible if I purchase a new HSA qualified medical plan?

The IRS has not come out with a final ruling on this yet, and while the law is silent (i.e. does not allow it) you can not "roll over" or "carry forward" your deductible.

Define the meaning of “tax free contributions” – Are contributions to an HSA fully deductible for income tax purposes in the same manner as an IRA?

Yes, as an individual your HSA deposits are 100% tax deductible.

If you have an employer provided HSA insurance plan, the employer contribution and the employee contribution is made pre-tax, or the employee can take their contribution tax free through an above the line deduction.

Can HSA money be used to pay for prescription eyewear? How about cosmetic dentistry or regular restorative (non-cosmetic) dentistry?

Yes to all of the above, but it is unlikely the expenses will count towards your deductible for your health insurance plan.