the other part the literature mentions is that the money grows in the HSA
like an IRA
but does one have investment choices on this money? or does that refer to
just some money market like interest paid on the balance?

we're facing as a family the decision to move from an HMO+FSA health
insurance to an HSA

in reading some of the Health Savings Account (HSA) literature, it
appears there is a restriction that to be eligible, one can not be
claimed as dependent on someone else's tax return

would it also make sense to pre-load a larger contribution to the HSA
for the 1st year one enrolls and then use that as a "bank" while
reducing future years contributions slightly ? anything else to consider
about HSA rules ?

Generally speaking you are permitted to invest some portion of the HSA
Savings account in a mutual fund. That choice MAY be restricted

while we file a joint return, one of our children is claimed as dependent (under 24)
and is currently covered by our HMO and FSA as he is a full time student while working
part time at the university. does that mean he would not be covered by the HSA ?

the other part the literature mentions is that the money grows in the HSA like an IRA
but does one have investment choices on this money? or does that refer to just some
money market like interest paid on the balance?

would it also make sense to pre-load a larger contribution to the HSA for the 1st year
one enrolls and then use that as a "bank" while reducing future years contributions
slightly ? anything else to consider about HSA rules ?

Part 2: Yes, you want as much tax-free growth as soon as possible.
Change your view of the HSA -- it's a super-IRA so fund it before
anything else. It may very well be even better than a 401K w/ matching
(depending on how much match and the quality of investments). When
spent on medical, it's the only tax vehicle that is free from taxes
both on contribution and withdrawal

Not so, because the FSA (flexible spending account, a.k.a. Section 125)
he already has is exactly the same -- free from taxes on contributions
and withdrawals when used for medical.

Compared to individual health insurance premiums and itemized deductions
(Schedule A), the HSA is probably a better deal, but only because of the
limits imposed on medical itemized deductions. Compared to
employer-subsidized group health coverage including an FSA, not so clear.

It's hard to see how you are going to realistically build up a
significant balance in the HSA. A younger single person in excellent
health, then maybe yes.

Sure. You just have to know beforehand how much you plan on spending
every year on medical. Plan too much, lose money you don't use. Plan
too little, pay out of pocket and take the tax hit.

Let's be honest here. Employer-subsidized group health coverage is
coming from your salary -- it's part of your total compensation
package. If your employer cancelled health insurance, would you not
raise holy hell and probably quit? Likewise, if an employer switches
you to a HDP+HSA plan, you should demand they also contribute to your
HSA -- otherwise, it's a paycut.

Annual contributions for an HSA is $2850 for a single person, $5650
for a family. To open an HSA, you only need to be in a plan with
deductibles of $1100/single, $2200/family.[...]

Annual contributions for an HSA is $2850 for a single person, $5650
for a family. To open an HSA, you only need to be in a plan with
deductibles of $1100/single, $2200/family.[...]

Stop there. You can only contribute up to the amount of your
deductible. (lesser of your deductible or the maximum amounts you
cite). Please consult the IRS Pub referenced earlier (969).

Law was changed for 2007. You now can contribute up to the IRS max no
matter what your deductibles are.

wyu@talisys.com wrote:

Law was changed for 2007. You now can contribute up to the IRS max no
matter what your deductibles are.

Can you elaborate or provide a link that shows the description and impact
of the new law you are referring to?

wyu@talisys.com wrote:

coming from your salary -- it's part of your total compensation
package. If your employer cancelled health insurance, would you not
raise holy hell and probably quit? Likewise, if an employer switches
you to a HDP+HSA plan, you should demand they also contribute to your
HSA -- otherwise, it's a paycut.


Can't argue with you there. I made a similar point about
employer-matching of 401k contributions once on this very forum, but not
many saw it my way.

Mark Bole wrote:

Can't argue with you there. I made a similar point about
employer-matching of 401k contributions once on this very forum, but
not many saw it my way. ;-)


First, your point wasn't all that similar - and I thought we agreed it
was "boggle".

Cal wrote:
Generally speaking you are permitted to invest some portion of the HSA
Savings account in a mutual fund. That choice MAY be restricted

thank you. if it is restricted, how does the money grow?

Law was changed for 2007. You now can contribute up to the IRS max no
matter what your deductibles are.

Publication 553 (3/2007), Highlights of 2006
tax changes. Specifically, the section entitled "Health Savings Account
(HSA) Deduction Limits Increased", at
http://www.irs.gov/publications/p553/ch01.html#d0e1626

I still don't see how it's a "super IRA" or "the ultimate retirement
account" "even better than a 401K w/ matching" that one should "plan
[their] investments around" as was claimed in wyu's first post. I still
see it as just one of several ways to deduct medical expenses from
taxable income, not "the only tax-free vehicle". Unless I'm missing
something (again), withdrawals used for other than medical expenses are
still taxable income (plus a 10% penalty if under age 65).

It may very well be even better than a 401K w/ matching (depending on how much match and the quality of investments).

On Jul 27, 8:51 am, Mark Bole <ma...@pacbell.net> wrote:
I still don't see how it's a "super IRA" or "the ultimate retirement
account" "even better than a 401K w/ matching" that one should "plan
[their] investments around" as was claimed in wyu's first post. I still
see it as just one of several ways to deduct medical expenses from
taxable income, not "the only tax-free vehicle". Unless I'm missing
something (again), withdrawals used for other than medical expenses are
still taxable income (plus a 10% penalty if under age 65).

I was making this point that it does everything an IRA does but more.
If you use it for medical, it tax-free contributing, tax-free
withdrawal. If you don't use it for medical during retirement, then it
acts like an IRA. Studies show that medical is a HUGE expense during
retirement so why would you use a HSA for non-medical and then use
your IRA/401K for medical? Switch it around, save it for medical and
given how people's lifespans are getting extended by medicine, it's as
good as tax-free as long as you can avoid dipping into it for non-
medical.

I was making this point that it does everything an IRA does but more.
If you use it for medical, it tax-free contributing, tax-free
withdrawal. If you don't use it for medical during retirement, then it
acts like an IRA. Studies show that medical is a HUGE expense during
retirement so why would you use a HSA for non-medical and then use
your IRA/401K for medical? Switch it around, save it for medical and
given how people's lifespans are getting extended by medicine, it's as
good as tax-free as long as you can avoid dipping into it for non-
medical.

Apparently you are able to reimburse any qualified medical spending that
hasn't
been reimbursed or deducted previously, no matter how old it is, since
you opened the account.

"Justin" <nospam@insightbb.com> wrote in message
news:slrnfakb9j.1or.nospam@debian.dns2go.com...

Apparently you are able to reimburse any qualified medical spending that
hasn't
been reimbursed or deducted previously, no matter how old it is, since
you opened the account.


That's my theory, too, but I haven't been able to find anything definitive
and authoritative. Any pointers?