Page 24 - Tacony 2021 Annual Benefits
P. 24
Distributions Are There Time Limits to Use Funds?
How Do I Use My HSA to Pay for Expenses? The funds may be used for any qualiied expense,
Keeping certain IRS rules in mind, you have complete provided the service date occurs after the date you
opened the HSA. For example, you cannot use funds
control over using your HSA money. You spend HSA from your HSA for services received in 2020 if you
money tax-free when you use funds to pay for qualiied open the account on January 1, 2021.
medical expenses (as deined by the IRS Code section
223). Keep receipts of your expenses in case they Can I Pay for Services Not Covered by My
are ever needed. You may continue to use the HSA Health Plan?
until the funds are depleted, even if you are no longer
enrolled in an HSA-qualiied plan. Some examples of IRS-deined “qualiied medical
expenses” may not be covered by your health plan.
Below is an example. When you use your HSA to pay for services which are
not covered by your health plan, the expense is applied
You joined the plan last year toward your out-of-pocket costs.
You contributed $600 you never spent
You enrolled in Medicare this year and are no What if I Use My HSA on Non-Qualified
longer enrolled in the HSA-qualiied health plan Medical Expenses?
You can use unused funds in your HSA to for The amount you spend on the non-qualiied expense
medical expenses while enrolled in your new is considered taxable. You are also responsible for a
Medicare plan 20% penalty on the amount. In addition, non-qualiied
expenses will not apply toward reaching your deductible
You cannot contribute toward your HSA tax or out-of-pocket maximum.
free since you are no longer enrolled in an HSA-
qualiied plan
Examples of Eligible Expenses Examples of Non-Eligible Expenses
Doctor/specialist visits COBRA premiums Health plan premiums
Emergency room bills Medicare premiums Cosmetic surgery
Medical equipment Dental/orthodontic care Gym or health club costs
Prescriptions Eyeglasses/contacts Food, clothing, household items
Chiropractic care More examples available
in IRS publication 502
24 2021 Benefits Enrollment
How Do I Use My HSA to Pay for Expenses? The funds may be used for any qualiied expense,
Keeping certain IRS rules in mind, you have complete provided the service date occurs after the date you
opened the HSA. For example, you cannot use funds
control over using your HSA money. You spend HSA from your HSA for services received in 2020 if you
money tax-free when you use funds to pay for qualiied open the account on January 1, 2021.
medical expenses (as deined by the IRS Code section
223). Keep receipts of your expenses in case they Can I Pay for Services Not Covered by My
are ever needed. You may continue to use the HSA Health Plan?
until the funds are depleted, even if you are no longer
enrolled in an HSA-qualiied plan. Some examples of IRS-deined “qualiied medical
expenses” may not be covered by your health plan.
Below is an example. When you use your HSA to pay for services which are
not covered by your health plan, the expense is applied
You joined the plan last year toward your out-of-pocket costs.
You contributed $600 you never spent
You enrolled in Medicare this year and are no What if I Use My HSA on Non-Qualified
longer enrolled in the HSA-qualiied health plan Medical Expenses?
You can use unused funds in your HSA to for The amount you spend on the non-qualiied expense
medical expenses while enrolled in your new is considered taxable. You are also responsible for a
Medicare plan 20% penalty on the amount. In addition, non-qualiied
expenses will not apply toward reaching your deductible
You cannot contribute toward your HSA tax or out-of-pocket maximum.
free since you are no longer enrolled in an HSA-
qualiied plan
Examples of Eligible Expenses Examples of Non-Eligible Expenses
Doctor/specialist visits COBRA premiums Health plan premiums
Emergency room bills Medicare premiums Cosmetic surgery
Medical equipment Dental/orthodontic care Gym or health club costs
Prescriptions Eyeglasses/contacts Food, clothing, household items
Chiropractic care More examples available
in IRS publication 502
24 2021 Benefits Enrollment
