Healthcare Shopper Advice

Answers to Your Questions About Health Insurance

Health Savings Accounts

Qualifying HSA Withdrawals

Question: Can I pay my insurance premiums from my hsa account?

Answer: Not at this time. That would be a non-medical withdrawal and as such be subject to penalties and taxes. This begs the question: what is a qualified withdrawal? A qualified medical withdrawal is one for medical care as defined by Internal Revenue Code Section 213(d). The expenses must primarily be used to alleviate or prevent physical or mental defect or illness. A partial list is provided in IRS Pub 502 at the IRS website. Examples of expenses that cannot be included would be maternity clothing, cosmetic surgery, health club dues or toiletries.

Posted by Phil Daigle on July 10, 2007 1:13 PM
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Variable HSA Deposits

Question: >> I'd would like to pay a certain amount into my United Healthcare servings account. I understand the monthly minimum amount is $25 but are you flexible to allow my deposit to fluctuate each month as long as I do not deposit less than $25 a month? I mean, would you allow me to deposit, for instance, $50 in one month, $38, in the next, $100 in the following, and so on?

Answer: Yes and no. Let me explain. United Healthcare's HSA administrator, Exante Bank, require that you choose a predetermined amount to deposit each month so that they can routinely collect this by electronic funds transfer. You can always send in additional lump sum deposits by check, however, which would achieve your end result of variable deposits. And yes, you're correct in that $25/month is the minimum deposit. If you wanted to change this to another set amount, say $50, this can be arranged at any time.

Posted by Phil Daigle on July 10, 2007 1:01 PM
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Lump sum HSA Deposits

Question: is it ok to make lump sum deposits in my hsa accout.

Answer: The short answer is yes. You will want to check with your HSA administrator about how best to do that. Most administrators will accept checks. You will also want to ensure that you do not exceed the maximum annual contributions of $2,850 if you have an individual plan or $5,650 if you have a family plan. Additionally if you are over the age of 55 you can make catch-up contributions. For 2007 the maximum amount you can contribute is $800 as a catch-up contribution. You might find the US Treasury website helpful. Hope this helps.

Posted by Phil Daigle on July 10, 2007 12:58 PM
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Unused HSA Contributions

Question: What happens to the money in my health savings account if I havent used it by the end of the year? Is it like a caffeteria plan and I lose it if I dont use it?

Answer: Unlike a cafeteria plan or Flexible Spending Account, any funds in your Health Savings Account remain yours and will grow, tax deferred, until you reach age 65. You never lose the money. Even if you need to use the money for anything other than qualifying medical expenses related to medical, dental or vision, you can do so with a 10% penalty and payment of taxes on the amount withdrawn.

Posted by Phil Daigle on July 10, 2007 12:25 PM
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Health Savings Account Resources

Question: I recently bought a HSA PPO health plan but the insurance doen't have an actual health savings account to go with it. do you have any recomendations?

Answer: Thanks so much for your question. You may want to check with your local bank as they may offer Health Savings Accounts. Alternatively Exante Bank have excellent online resources. Their accounts have a Mastercard for debits and allow for additional cardholders.

Posted by Phil Daigle on July 3, 2007 1:41 PM
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