HSA Help (Confused)

[Guest Venomhonda]

I'm hoping someone can help me understand my HSA. I really don't understand it, and people explain it to me in a language I don't understand.

I'm 29. I have a 3000/6000 plan. My employer does not pay or give any benefits. I have my own HSA, through my own insurance guy. I have had for about 2.5 years now. I don't make enough to contribute, never contributed (or know how to contribute). I pay about $60/month for it out of pocket.

Here's my question. I generally don't go to the doctor (actually have never needed or gone since 1997 because I don't get sick or cut off any limbs! I recently hurt my back splitting firewood at home, and had to go to an orthopedic surgeon. Luckily I don't need surgery, but I am going through 4 weeks of physical therapy. On the explanation of benefits it says my $3000 has not been met and $0 has been met towards my deductible, my insurance will pay 100%, and I have 0% responsibility, and my co pay is $0. That sounds contradictory to me, like I have to pay a $3000 deductible to get free physical therapy?!? I don't understand.

I really don't understand my insurance, it's like they aren't paying anything. Could someone please explain for someone who doesn't understand? Any help is greatly appreciated!!

[Guest morris]

To be able to make contributions to an HSA, you cannot have first dollar coverage. It is obvious you DO have first dollar coverage. Your plan apparently has 100% coverage in the event of an accident.

So be glad you haven't been making contributions to your HSA. There are penalties for making contributions that are ineligible. Might as well cancel (close) your HSA. You're not making contributions, you can't legally make contributions, and there's probably a monthly admin fee to keep it open at the bank (an HSA is a savings account for medical expenses).

What?! You haven't been getting HSA statements from the bank? No year end forms to file with your tax return? Maybe you need to have a little talk with your insurance agent.

[Guest Venomhonda]

To be able to make contributions to an HSA, you cannot have first dollar coverage. It is obvious you DO have first dollar coverage. Your plan apparently has 100% coverage in the event of an accident.

So be glad you haven't been making contributions to your HSA. There are penalties for making contributions that are ineligible. Might as well cancel (close) your HSA. You're not making contributions, you can't legally make contributions, and there's probably a monthly admin fee to keep it open at the bank (an HSA is a savings account for medical expenses).

What?! You haven't been getting HSA statements from the bank? No year end forms to file with your tax return? Maybe you need to have a little talk with your insurance agent.

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).

[MARYMM]

To be able to make contributions to an HSA, you cannot have first dollar coverage. It is obvious you DO have first dollar coverage. Your plan apparently has 100% coverage in the event of an accident.

So be glad you haven't been making contributions to your HSA. There are penalties for making contributions that are ineligible. Might as well cancel (close) your HSA. You're not making contributions, you can't legally make contributions, and there's probably a monthly admin fee to keep it open at the bank (an HSA is a savings account for medical expenses).

What?! You haven't been getting HSA statements from the bank? No year end forms to file with your tax return? Maybe you need to have a little talk with your insurance agent.

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.

[Guest morris]

Venom--you're contradicting yourself. Quotes from your first post: ".......I'm hoping someone can help me understand my HSA". "I have my own HSA through my insurance guy".

Quote from second post: "I never set up the HSA portion".

?????????????????????????

[JanetM]

I'm confused too.

[Guest Venomhonda]

I have a high deductible plant tha is supposed to be attached to an HSA. I pay $60 for the premium each month out of pocket (no contribution at all from my employer). I never set up the bank account portion of the HSA. I don't know how, where, or even have the money to put in the account. So there is NO HSA in place yet. Can't afford it.

[MARYMM]

I have a high deductible plant tha is supposed to be attached to an HSA. I pay $60 for the premium each month out of pocket (no contribution at all from my employer). I never set up the bank account portion of the HSA. I don't know how, where, or even have the money to put in the account. So there is NO HSA in place yet. Can't afford it.

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.

[Guest Venomhonda]

As nobody understands....I HAVE NO MONEY TO FUND IT.

I am getting rid of my insurance tomorrow. I drained my savings and Christmas fund to pay for my PT. It's too expensive to maintain on my own, and I need more income to stay afloat in this economy. Thanks for everyones insight.

[K2retire]

As nobody understands....I HAVE NO MONEY TO FUND IT.

I am getting rid of my insurance tomorrow. I drained my savings and Christmas fund to pay for my PT. It's too expensive to maintain on my own, and I need more income to stay afloat in this economy. Thanks for everyones insight.

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.

[Guest Venomhonda]

As nobody understands....I HAVE NO MONEY TO FUND IT.

I am getting rid of my insurance tomorrow. I drained my savings and Christmas fund to pay for my PT. It's too expensive to maintain on my own, and I need more income to stay afloat in this economy. Thanks for everyones insight.

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?

[MARYMM]

As nobody understands....I HAVE NO MONEY TO FUND IT.

I am getting rid of my insurance tomorrow. I drained my savings and Christmas fund to pay for my PT. It's too expensive to maintain on my own, and I need more income to stay afloat in this economy. Thanks for everyones insight.

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.

[Guest Venomhonda]

I talked to an accountant friend and he said that it is worthless to do it that way. There would be too much hassle, fees to pay for the HSA account, etc. He said there would be hardly any tax breaks if any at all.

I canceled my health insurance, and drained my accounts to pay all the PT and doctor bills up front. Thanks for the help anyway.

[Guest allancoleman]

Venomhonda ,

Your " accountant friend " has given you very poor advice . And the more informed folks here , especially MARYMM , have continued to give you excellent advice .

In my wife and my own personal HSA circumstances , we have two individual HSAs . Mine has over 23k in it and my wife's has over $11k for a combined total between the two HSAs of over $34k . And we got a income tax deduction for approximately that entire amount deposited amount against our past income tax returns .

All HSA deposits are completely tax deductable for that tax year

All HSA funds spent for qualified medical expenses are completely taxfree

And all HSA account earnings are completely taxfree

And now that the wife and I are over 65 and on Medicare and cannot make any future HSA deposits , those entire HSA account funds can be used in the future for any qualifed medical expenses including qualifed extended health care expenses and to pay for medical premiums for my company retiree medical plans for myself and my wife in the future too .

Remember , Venomhonda , that every single tax calendar year that you miss making a HSA deposit going forward is gone forever and can never be made up . Good luck with the rest of your health care decisions in the future .

[Guest Venomhonda]

That's great for you at 65, and I do understand that you get your stuff tax free....

However, I am 29. I don't make hardly anything with a college degree, in my field. I could not contribute money into my HSA. My employer offers NO BENEFITS. I live paycheck to paycheck.

I get hardly anything back on taxes. I feel that if you choose a bank that you will put YOUR money in, why should YOU have to pay a fee to hold YOUR money.

Second, even with my money market account, I drew hardly any interest, and COULD NOT put on my taxes because it was under $100 in interest. So why would putting money into an HSA be a benefit when: 1.) You have to pay money to open an HSA account 2.) I cannot contribute money each year. 3.) Interest would be very low, that I cannot claim on taxes anyway.

Remember, for the 15,000 time I've said it...I HAVE NO MONEY.

So therefore I now have no health insurance, and will not, and refuse to do Obamacare...period.

[K2retire]

Apparently you also refuse to listen.

[Guest allancoleman]

That's great for you at 65, and I do understand that you get your stuff tax free....

However, I am 29. I don't make hardly anything with a college degree, in my field. I could not contribute money into my HSA. My employer offers NO BENEFITS. I live paycheck to paycheck.

I get hardly anything back on taxes. I feel that if you choose a bank that you will put YOUR money in, why should YOU have to pay a fee to hold YOUR money.

Second, even with my money market account, I drew hardly any interest, and COULD NOT put on my taxes because it was under $100 in interest. So why would putting money into an HSA be a benefit when: 1.) You have to pay money to open an HSA account 2.) I cannot contribute money each year. 3.) Interest would be very low, that I cannot claim on taxes anyway.

Remember, for the 15,000 time I've said it...I HAVE NO MONEY.

So therefore I now have no health insurance, and will not, and refuse to do Obamacare...period.

I remember when I was alittle younger than you when I returned from Vietnam in 67 and after having to leave college in my junior year because I didn't want to continue to go into debt with no job certain in my future and then trying to buy my first home in the Jimmy Carter presidential term later in my life and paying 21% interest rates at that particularv time , I have felt your pain , Venomhonda .

As I said , good luck getting a start with your life .