1. Home
  2. Financial Planning
  3. HSA's- some interpretation needed.

HSA's- some interpretation needed.

Some questions as to how HSA money can be spent.

Background:

I have an HSA thru work with an HDHP. I sign up for HDHP and my company puts in $750 into my HSA (regardless of my contribution, so it's free money). I contribute more (because investment choices have a $1000 minimum).

I also don't see a doctor very much. Maybe to get a flu shot or complain about lower back pain or allergies and get a perscription.

My wife uses her health plan at work. Great plan, she is in hospital now (pregnant with twins, but has some high risk symptoms, so she has been there for 10 of last 13 days, and won't be leaving anytime soon). Her health plan has a $100 deductable for the hospital stay, rest is covered by her insurance (again, this a plan offered by her employer)

**caveat- my wife works in HR and administers health plans, retirement plans and does other HR work for a living**

Can my HSA money pay for my wife's medical expenses?

My answer- yes- because an HSA is just a health care tax shelter. Provided money is spent on eligible medical expenses, it does not matter which person's name is on the bill (I could actually pay for you medical care out there on usenet).

Her answer- no- because the HSA is part of my plan and she is not covered by it.

Anyone care to chime in?

Some references

formatting link
Qualified medical expenses. Qualified medical expenses are those expenses that would generally qualify for the medical and dental expenses deduction. These are explained in Publication 502, Medical and Dental Expenses. Examples include amounts paid for doctors' fees, prescription and non-prescription medicines, and necessary hospital services not paid for by insurance. Qualified medical expenses are those incurred by the following persons. Yourself and your spouse.

All dependents you claim on your tax return.

Any person you could have claimed as a dependent on your return except that:

The person filed a joint return,

The person had gross income of $3,300 or more, or

You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2006 return.

-------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup.

Reply to
jIM
Loading thread data ...

I believe that she is correct. The reference that you listed "expenses for you or your wife or children" would only apply IF they were covered under The Plan.

ex:You have a FAMILY plan, have $5,000 accumulated IN TH PLAN and your daughter incurs $4,000 of uncompensated expenses, and your son incurs $2,000 of uncompensated expense, YOU have NO EXPENSE.

You could use the entire $5,000 to apply to those expenses..... Kalman J. Lester CLU

-------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup.

Reply to
Cal

Yes, for federal tax purposes paying unreimbursed medical expenses of spouse/dependents is an allowable use for HSA funds, even if they're not covered by the HDHP.

The rules were different for MSAs, and if you had an MSA now you couldn't do this type of distribution in a year you contributed to the MSA - that makes the distribution taxable. Perhaps she's thinking of the MSA rules?

-Tad

-------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup.

Reply to
TB

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.