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5 Twists On Health Savings Accounts You May Not Know

Lively · February 23, 2017 · 4 min read

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Do you have a Health Savings Account (HSA)? Or maybe you are thinking about getting one? How would you like to test your knowledge about HSAs? Here are a few Health Savings Accounts tips that may have escaped your detection.

HSA Tips

#1 – You can cash in later

You know HSAs help pay for covered healthcare expenses. Right? But, did you know there is no time limit on getting reimbursed? As long as you incurred the expenses after you set up your account, you can get your tax-free reimbursement any time in the future. Seriously, any time. Also, unlike a 401k, there is no mandatory distributions after a set age. If you never want to make distributions, you don’t have to. Here’s the catch. You have to keep those receipts. Hey, it is IRS-governed, after all.

#2 – HSAs cover more than the typical medical plan

Want to banish your eyeglasses? Wish you could get help with paying for LASIK surgery? HSAs can help. IRS-qualified healthcare expenses include more than your average medical plan, like dental and vision care (including LASIK surgery, even if you don’t have a dental or vision plan).

Hearing aids are another big item that most medical plans don’t cover but they are qualified healthcare expenses under your HSA. You can check out the IRS site for the details. Lots and lots of details.

#3 – After age 65, you are penalty-free for non-medical expenses

“What!!?? Are you serious?” Yep! You can use your HSA savings for non-medical expenses. However, there are consequences (bet you expected that).

  • The IRS taxes funds withdrawn for non-medical expenses – AND –

  • You get hit with a 20% penalty

But wait. There is a very BIG exception. If you already celebrated your 65thbirthday (Happy birthday!), you can withdraw the money for non-medical expenses with no penalty.

You WILL be taxed on withdrawals used for non-medical expenses – no matter your senior citizen status.

#4 – Your HSA stays an HSA if your spouse inherits it

What happens if you still have your HSA when you pass away? If you named your spouse as your beneficiary, your spouse takes over the HSA.

If you did not name a beneficiary or named someone other than your spouse, the HSA is no longer an HSA but taxable income for the person inheriting the account. By the way, some states make you have the consent of your spouse if you try to do an end-run around naming your spouse as a beneficiary.

#5 – You can keep your HSA even when changing medical plans

Most HSA account holders know the account is theirs to keep. Even if they change jobs, they take the HSA with them.

An HDHP is a requirement to set up and contribute to an HSA. But, did you know if you change to a non-HDHP, you can still use your established HSA?

That’s right. You can take tax-free withdrawals for reimbursing qualified healthcare expenses. You just won’t be able to make new contributions to your savings plan. How did you do?

Disclaimer: As always, the information provided is for your general background only and is not intended to constitute legal or tax advice as to your specific circumstances. We recommend you review legislation with legal counsel and visit your tax advisor for tax assistance and advice. We also recommend that you optimize your healthcare spending, maximize your savings, and better your livelihood!

Lively

Lively

Lively is the modern HSA experience built for—and by—those seeking stability in the ever-shifting healthcare landscape. By harnessing modern innovation and deep industry expertise, Lively is committed to bridging today’s savings with tomorrow’s unknowns. Unlike traditional institutions hindered by bureaucracy, Lively’s commitment extends beyond initial set up to providing dedicated, ongoing support and education for every step. So each HSA can reach its maximum potential with minimal headache.

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Benefits

2023 and 2024 HSA Maximum Contribution Limits

Lively · May 16, 2023 · 3 min read

On May 16, 2023 the Internal Revenue Service announced the HSA contribution limits for 2024. For 2024 HSA-eligible account holders are allowed to contribute: $4,150 for individual coverage and $8,300 for family coverage. If you are 55 years or older, you’re still eligible to contribute an extra $1,000 catch-up contribution.

comparing hsa versus fsa

Benefits

What is the Difference Between a Flexible Spending Account and a Health Savings Account?

Lauren Hargrave · February 9, 2024 · 12 min read

A Health Savings Account (HSA) and Healthcare Flexible Spending Account (FSA) provide up to 30% savings on out-of-pocket healthcare expenses. That’s good news. Except you can’t contribute to an HSA and Healthcare FSA at the same time. So what if your employer offers both benefits? How do you choose which account type is best for you? Let’s explore the advantages of each to help you decide which wins in HSA vs FSA.

Benefits of HSA employer matching

Health Savings Accounts

Ways Health Savings Account Matching Benefits Employers

Lauren Hargrave · October 13, 2023 · 7 min read

Employers need employees to adopt and engage with their benefits and one way to encourage employees to adopt and contribute to (i.e. engage with) an HSA, is for employers to match employees’ contributions.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.

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