Pre-Tax Accounts Series- HSA’s
MAY 5TH, 2020
Welcome to the Pre-Tax Accounts Series!
In this series, I’ll cover the pre-tax accounts that I currently use and pre-tax accounts that I want to use in the future!💎💎💎
First, let’s cover HSA’s!
HSA’s are savings accounts for qualified healthcare expenses. To be eligible for an HSA, you MUST have a high-deductible health plan.
Contributions to HSA’s generally aren’t subject to federal income tax and the earnings in the account grow tax-free.
Unspent money in an HSA rolls over at the end of the year, so it’s available for future health expenses.
The money in your HSA remains available for future qualified medical expenses even if you changes health insurance plans, go to work for different employer, or retire.
The 2020 allowable annual contribution for individual is ~$3,500. For family ~$7,100.
How does my HSA work?
A pre-taxed payroll deduction is made and deposited into my HSA.
I can change the amount of the payroll deduction at any time.
My employer contributes to my HSA annually.
I have a HSA debit card that I use to pay for for medical expenses.
How does my HSA save me money?
I am able to pay for ALL medical expenses, with PRE-TAXED money, for everyone covered under my insurance with my HSA.
I have not paid for a medical expense using post-tax dollars since 2015.
Which means I am able to use my post-tax dollars towards eliminating my debt and OWNING MY CHECK!
💎 Fun fact! I was able to pay for all medical bills from the birth of my daughter with funds from my HSA!🤱🏾💕
I have been working for my current employer since 2013 and started contributing to my HSA in 2015. Hold up! Why did I wait to contribute to my HSA until 2 YEARS AFTER I STARTED WORKING?!
Simple. I didn’t know what a HSA was and didn’t know that a HSA was one of my benefits.🤦🏾♀️ This happens to so many people!! You know how much you get paid right? You should also know what your benefits are! Learn from me! I could have had up to $7,000 more in my HSA, if I would have informed myself of my benefits. Don’t rely on your employer, do research yourself. Call your employers benefits center or contact HR.
Now for HSA eligible expenses!
*HSA benefits may vary. Check with your employer.
*UPDATE* Because of the CARES Act, you no longer need a prescription for over-the-counter drugs and medicines. So stock up!
Let’s review some definitions.
Letter of Medical Necessity(Letter of MN)
For certain products/services, you will need to submit a Letter of Medical Necessity. This letter must be signed by your doctor, to verify the expense is a medically necessary treatment for a known medical condition.
Rx
You must submit an actual prescription from your doctor. The prescription must be written by your doctor and dated on or before the date you incurred the expense to verify this over-the-counter medicine is prescribed for a known medical condition.
Receipts
FOR ALL HSA EXPENSES, REQUEST AND KEEP YOUR RECEIPTS! Receipts are required! In the event of an audit, you want to be prepared to provide all necessary receipts.
*HSA benefits and requirements may vary. Review your HSA benefit plan for the most accurate information,
Please comment with questions!
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