Page 93 - 2021-2022 New Hire Benefits
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health savings accounts FAQs p. 4 of 8
28. Does tax filing status Uoin vs separate) affect 33. Who decides whether the money I'm
my contribution? spending from my HSA is for a "qualified
medical expense"?
Tax filing status does not affect your contribution.
You are responsible for that decision, and
29. I'm a single parent with famil HDHP coverage therefore should familiarize yourself with what
but have a child/relative that can be claimed as qualified medical expenses are (as partially
a dependent for tax pu and this defined in IRS Publication 502) and also keep
dependent also has non-HDHP coverage. How your receipts in case you need to defend your
mu I contribute to my HSA? expenditures or decisions during an audit.
You can contribute up to the statutory limit
34. What happens if I don't use the money in the
($7,100 fo 2020 and $7,200 for 2021) to your HSA.
HSA for medical expenses?
30. May a self- person contribute to an If the money is used for something other than
HSA on a pre-tax basis? qualified medical expenses, the expenditure
No. Self-employed persons may not contribute to
will be taxed and, for individuals who are not
an HSA on a pre-tax basis and may not take the disabled or over age 65, subject to a 20% tax
amount of their HSA contribution as a deduction penalty.
for SECA purpos However, they may contribute
to an HSA with after-tax dollars and take the 35. Are dental and vision care qualified medical
expenses under a Health Savings Account?
above-the-line deduction.
Yes, as long as these are deductible under the
Using your HSA current rules. For example, cosmetic procedures,
like cosmetic dentistry, would not be considered
31. Does an HSA pay for the same things that qualified medical expenses.
regular insurance pays for?
36. Can I use the money in my HSA to pay for
HSA funds can pay for any "qualified medical
expense", even if the expense is not covered medical care for a family member?
by your HDHP. For example, qualified dental Yes, you may withdraw funds to pay for the
and vision care expenses are covered. Over-the qualified medical expenses of yourself, your
counter medicines are not covered without a spouse or a dependent without tax penalty. This
prescription. If the money from the HSA is used is one of the great advantages of HSAs.
for qualified medical expenses, then the money
spent is tax-free. 37. Can I use my HSA to pay for medical services
provided in other countries?
32. How do I know what is included as "qualified Yes.
medical expenses"?
38. Can I pay my health insurance premiums with
Unfortunately, we cannot provide a definitive list
of " qualified medical expenses". A partial list is an HSA?
provided in IRS Publication 502 (available at www. You can only use your HSA to pay health insurance
irs.gov). There have been thousands of cases premiums if you are collecting Federal or State
involving the many nuances of what constitutes unemployment benefits, or you have COBRA
"medical care" for purposes of section 213(d) of continuation coverage through a former employer.
the Internal Revenue Code. A determination of
whether an expense is for "medical care" is based 39. Can I purchase long-term care insurance with
on all the relevant facts and circumstances. To money from my HSA?
be an expense for medical care, the expense has Yes, if you have tax-qualified long-term care
to be primarily for the prevention or alleviation insurance. However, the amount considered a
of a physical or mental defect or illness. The qualified medical expense depends on your age.
determination often hangs on the word "primarily". See Limit on long-term care premiums you can
deduct in the instructions for Schedule A (Form
1040)
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