MARYMM

Add back to Box 1 earnings : 401(k) and/or 403(b) contributions from Box 12 (Codes D and E) Section 125 Contributions reported in Box 14 (if provided) Subtract GTL in Box 12 Code C

I agree. I wasn't part of the ASPPA Linked In Group, but was in several payroll professionals groups. Coincidentally, I removed myself from email notifications for all of them this morning. There was no value in the space they were taking up in my in-box. I much prefer the BenefitsLink format and the listserv format for the American Payroll Association.

Since it is so early in the year (assuming calendar year = plan year), and the confusing enrollment process,your employer may be willing to allow you to undo/revise your election.

See IRS Pub. 502 for a discussion on this topic.

Doesn't sound like a qualifying event to me. And the credit history reason doesn't sit well with me. We sometimes get notification that an employee has not provided required documentation (Patriot Act) for their HSA account to be opened. HR handles this but I think their practice is to enroll the employee in the HRA instead of the HSA when this happens and the employee is not able to crrect the situation.

Perhaps to avoid being defaulted. If the plan has a rule that you can't have another loan once you've defaulted it could be an issue. The hardship distribution also removes the requirement for repayment - which seems to be the issue for this employee. But I agree with those questioning how an employee can "decide to default" since payments are usually via payroll deduction...

#1 - The payroll software may be able to stop the withholding when it reaches $1000.00. If it can't, why not let the employee elect $1000.08 ? maybe employer has a $1000 limit ? #2 - All employees should have been told about open enrollment for this benefit . Not sure what the penalties for non-compliance with plan document are.......

Yes but he can't get reimbursements for anything incurred prior to November 2011 - only expnses incurred since the HSA was established. From IRS Pub. 969: "For HSA purposes, expenses incurred before you establish your HSA are not qualified medical expenses. State law determines when an HSA is established. An HSA that is funded by amounts rolled over from an Archer MSA or another HSA is established on the date the prior account was established. "

What they are telling you is to run the money you already owe through the HSA before you use it to pay the PT to lower your tax bill. Since you have to pay it anyway, you might as well get the tax break for paying it. How much of a tax break? Are we talking $5.00 or $2,000? Whatever your tax rate is - 15% is the lowest Federal bracket, no ? Also, you should save any applicable state income tax on it. It could be a couple hundred dollars in savings. If you haven't already paid the medical bills, you could deposit the money in an HSA and then cut the checks from that account. But - be sure that your insurance is HSA Eligible before you do that. You stated that the Explanation of Benefits said that the insurance would pay 100% and an HSA eligible HDHP would not have that first dollar coverage. You have to decide if its worth going thru all the hoops to save on your taxes. Also, IIRC correctly, you can't file a 1040EZ if you have an HSA. If that is the case, your tax prep process might change.

There was a discussion on this site on this topic within the past 2 weeks. Try checking the HSA forum or searching for "HSA"

I think you need to contact the insurance company and have them explain the EOB to you. They should not be paying anything until you have incurred over $3000 in expenses. The only exception is for preventive care. Since you will have to pay this bill for the orthopedic visit and the PT, you should open an HSA and start funding it. Then you can pay your bills with tax-exempt money. You don't have to fund the entire deductible - just deposit what you are going to pay to the providers. By going thru this step, you can save the federal (and state) income tax on those medical bills. If you google "HSA Bank Account" you will find some providers who offer HSA accounts. For example, my search turned up Bank of America and Chase, among others, which list "HSA's for Individuals" as one of their products.

I never set up the HSA portion. I don't know how, nor was told how. Further more, I can't contribute to start one, I don't make enough money, and I don't have any benefits from my employer (I am the only full time employee). What is the $60 you are paying per month for ? Is that the premium for the medical insurance ? You should talk to your insurance guy and make sure that the plan is HSA Eligible (an HDHP - or High Deductible Health Plan) before you open an HSA at your bank. Not every plan with a high deductible is an HDHP that is HSA eligible. You may just have a plan with a high deductible for certain events such as being hospitalized. Try to get a copy of the policy - or even better, the material they give you when they try to sell it to you. That might have a good summary that you can start with.

I would like to add to Masteff's excellent response that there is nothing in PPACA that I am aware of that would change this. The purpose of the TEFRA rule was to push the cost of medical coverage for actively employed individuals over 65 back onto their employers. I doubt that anything in PPACA would undo that. I too was a law firm business manager. Many of the partners, who had to pay the entire cost of their medical coverage, would opt out of the group coverage and purchase a Medigap policy on their own.

I stand corrected. It is the HSA participation, not the HDHP, that restricts the FSA participation. We actually advance the employer HSA contributions for those who have a documented need early in the year. But if you work for a company that doesn't fund the HSA, an employee who knows they are going to have a need early in the year may be able to use the FSA to pay the deductible - if the FSA document allows that.

The insurance contract could be revised to allow this coverage. If your employees contribute a portion of the premium, you could consider charging those who work 20- 30 hour a week more than those who work 30 hours . Even if you don't have contributions now, you could establish them for the part-timers.