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TOT: Medical Deductibles HSA accounts

BennyZ

Golden Knight
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Oct 11, 2003
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I need to have a minor procedure done and I had to pay in advance, which met my deductible so now I’m trying to think of any other medical things I can have done before the end of the year 😂. Also medical procedures seem to be one of the few things that charge you up front before they even do the procedure. It’s a little scary because I think their thought process is, if we don’t get our money up front and he dies we’ll never get paid.

Also I have money in my HSA but I was looking at that as part of my retirement savings since the HSA is tax free when you put it in and when you take it out it’s in someways better than even a 401k (either Roth or Traditional). Am I better off leaving my money in the HSA for retirement, when I am sure I will have plenty of medical expenses, and using other funds now, or paying with HSA funds now?
 
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I'm not eligible for an HSA, so I don't have one, however, if I had an insurance plan that allowed me to have an HSA, it's best to keep that money in there. Like you said, it's a tax advantaged account, but that being said, if you don't have cash to use for medical expenses, then you have to use the HSA. At least you're paying with pre-tax money :)
 
You can pay to the HSA as a contribution and immediately pay for an expense from it. It is better than just paying the medical expense directly because you can deduct the contribution. You don’t have to touch the existing HSA amount. This assumes you are eligible to contribute this year.
 
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I think the ideal move is paying with non HSA funds, keeping the receipts, then claiming once you hit whatever eligible ages since that comes out tax free.

But that’s only if you feel like you can pay out of pocket up front. I’d also think the medical facility should have your insurance and should know you’re at the deductible and then charge you only the coinsurance portion, whatever that is.
 
If you’re closer to retirement and in a higher tax bracket I’d use the HSA. If you’re younger, are maxing out the HSA, have the cash readily available, and in a lower tax bracket I’d pay cash. If you’re in the middle then you have to weigh the options.
 
I think the ideal move is paying with non HSA funds, keeping the receipts, then claiming once you hit whatever eligible ages since that comes out tax free.

But that’s only if you feel like you can pay out of pocket up front. I’d also think the medical facility should have your insurance and should know you’re at the deductible and then charge you only the coinsurance portion, whatever that is.
There is no age requirement (other than 18) to contribute and withdraw tax free for medical expenses.
 
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HSAs are triple tax advantaged: no tax on deposit, interest, or withdrawal. Definitely worth maxing out. I don't think there's any issue using it for medical expenses in a given year though. I set aside a portion of my yearly contributions as what I'll likely spend and the rest goes to the investment side. Investment side never gets touched until retirement.
 
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I need to have a minor procedure done and I had to pay in advance, which met my deductible so now I’m trying to think of any other medical things I can have done before the end of the year 😂. Also medical procedures seem to be one of the few things that charge you up front before they even do the procedure. It’s a little scary because I think their thought process is, if we don’t get our money up front and he dies we’ll never get paid.
Except most the time you pay up front and then get mystery bills for months after with new fees.
 
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There is no age requirement (other than 18) to contribute and withdraw tax free for medical expenses.
Right. I meant keeping it in now and later withdrawing assuming you’ve been investing those funds. Then you can claim those expenses later on tax free. And then additional non-medical withdrawals are taxed at regular income tax rates with no penalties after 60something or whatever.

But yes if you’re getting reimbursements for immediate medical expenses, there is no tax issue.
 
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I need to have a minor procedure done and I had to pay in advance, which met my deductible so now I’m trying to think of any other medical things I can have done before the end of the year 😂. Also medical procedures seem to be one of the few things that charge you up front before they even do the procedure. It’s a little scary because I think their thought process is, if we don’t get our money up front and he dies we’ll never get paid.

Also I have money in my HSA but I was looking at that as part of my retirement savings since the HSA is tax free when you put it in and when you take it out it’s in someways better than even a 401k (either Roth or Traditional). Am I better off leaving my money in the HSA for retirement, when I am sure I will have plenty of medical expenses, and using other funds now, or paying with HSA funds now?
Are you already maxing HSA contribution for the year? If not, then the decisions is simple. Pay from the HSA and reimburse the HSA for the amount of the bill and that amount is tax deductible. If you are already maxing you HSA contributions, then you might consider the advantage of the investment growth vs tax savings but it is going to depend on your individual numbers.
 
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Simple answer

-Max out your allowable HSA contribution
-Pay the out of pocket from your personal account, keeping an accounting of these out of pocket payments, and let the HSA grow.
-Later in life reimburse yourself from the HSA (assuming you've done your accounting)

(I'm not a CPA/CFP but I stayed in a Holiday inn Express last nite ......)
 
Except most the time you pay up front and then get mystery bills for months after with new fees.

At least now they can’t hit you with surprise out of network charges. As of earlier this year the provider must explicitely state if anything is out of network ahead of time and give you in network options.

If they forget to do that then they can’t bill it. Although many hospitals and other health care providers mis-bill and incorrectly charge you for things, if you’re none the wiser you‘ll just pay.
 
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At least now they can’t hit you with surprise out of network charges. As of earlier this year the provider must explicitely state if anything is out of network ahead of time and give you in network options.

If they forget to do that then they can’t bill it. Although many hospitals and other health care providers mis-bill and incorrectly charge you for things, if you’re none the wiser you‘ll just pay.
I was just talking about this with my family. Need to start keeping better receipts on this because it's pretty clear they're taking full advantage.
 
The accounts carry maximum contributions and you can’t reimburse a 2022 expense in 2030. Max out every yesr, assuming you have some sort of investment option for excess funds. Invest conservative, I would recommend assuming you are close enough to retirement to use the word. But pay the current year bill out of what you have. I don’t get paid to give this advice, but have significant experience in this area. save your current usable dollars. If ur so set on saving it for retirement, I am sure you could put the amount you would have paid out of pocket (not using the HSA) into some other retirement vehicle (401k, etc.). Even if not, keep it in the bank for emergencies that are not health related. This is what an HSA is for.
 
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Are you already maxing HSA contribution for the year? If not, then the decisions is simple. Pay from the HSA and reimburse the HSA for the amount of the bill and that amount is tax deductible. If you are already maxing you HSA contributions, then you might consider the advantage of the investment growth vs tax savings but it is going to depend on your individual numbers.
If I paid with a CC can I submit the bill to the HSA for reimbursement and then pay back the HSA?
 
If I paid with a CC can I submit the bill to the HSA for reimbursement and then pay back the HSA?
You can submit the bill for payment from your HSA. You would only be able to refund the HSA up to your yearly contribution amount though which is capped at $3650 individual and $7300 per family.
 
I pay w/ my CC to get those sweet, sexy points. If i'm unable to pay that off before the month closes, i'll reimburse myself out of my HSA. Usually doesn't happen, but i feel that it's a good way to rack up some CC points and still have the HSA as a back up option.
 
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HSAs are triple tax advantaged: no tax on deposit, interest, or withdrawal. Definitely worth maxing out. I don't think there's any issue using it for medical expenses in a given year though. I set aside a portion of my yearly contributions as what I'll likely spend and the rest goes to the investment side. Investment side never gets touched until retirement.
Exactly this. The best part is your paying your medical care, prescriptions, bloodwork etc with pretax dollars so you just slashed your medical expenses by ~20%!
 
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