creating an hsa account

[dimi1927]

dear community,

currently i do not have an hsa account set up, but i do have lots of out of pocket medical expenses each year. does it make sense for me to create an hsa account and also what steps would i need to take to get that accomplished. thank you so much for all of your help, time, and attention. i am really loving this community. everyone is super helpful and kind.

[BillM223]

You can contribute to an HSA only if you are covered by a High Deductible Health Plan (HDHP) - ask your benefits person - and have no conflicting coverage, like an FSA for either you or your spouse or Medicare or "normal" employer insurance and so on. Without this, there is no point in creating an HSA.

Having said that, I believe that an HSA is a great benefit, because the money that goes in is not taxed, the earnings are not tax, and the money that comes out for qualified medical expenses is not taxed.

In most cases, if your employer provided HDHP coverage, then your employer would help you create an HSA. Or you can do an Internet search, because there are many large reputable companies and banks which host HSAs.

[dimi1927]

thank you so much for the advice and intel. i just checked. so i have an employer provided health plan. and i just checked in my patient portal from the health insurance website and it states that my plan is hsa compatible. should i call up my health insurance to set up an hsa or is this something that i will need to discuss with my employer? thank you once again.

[dimi1927]

also you mentioned something called an FSA, how does this differ from an HSA? thank you

[BillM223]

An FSA is older (and IMHO, not as good) than an HSA. 

An FSA is a program handled by your employer, where you can contribute a modest amount of money to a "Flexible Spending Arrangement" ($2,850 in 2023) through payroll deduction. You would spend money on medical expenses and ask your employer for reimbursement. If you don't spend it all in one year, you may lose the rest or carry over a part of it to next year (it depends on your employer).

An FSA is conflicting coverage for an HDHP, so you can't contribute to an HSA while you are under an FSA. Furthermore, since FSAs automatically cover your spouse, if your spouse has an FSA, then you do, too, so no HSA contributions.

As I noted most employers who offer HDHP policies will help you set up an HSA, but if they won't, do a search on the Internet for HSA and large companies you recognize. Unfortunately, I can't make any suggestions.

Just remember that if you set up an HSA, it belongs to you, not to your employer. This means that when you leave your employer, you don't have to close the HSA (in fact, you get penalized for doing so) - it's similar to an IRA in this. And like an IRA, the HSA is persistent - it stays around for year and year.

[dimi1927]

wow incredible amount of useful info. thank you so kindly. may i please ask, so right now i am married filing jointly with my wife. i get health insurance coverage from my employer and my wife is on my health insurance plan. my wife also works but we don't use her employer's health plan. my wife is also above 65 and thus has medicare part a and b as a secondary insurance. but my wife has never needed to use her medicare part a and b for any medical treatments or appointments. we always use our primary health insurance from my employer. am i still allowed to open an hsa account even though my wife has medicare part a and b as a secondary. (note: i am not 65 and do not have medicare of any kind). also if i am allowed to open an hsa account, despite my wife's secondary medicare part a and b, will my wife be allowed to use the hsa account to pay for her medical expenses? or will i only be allowed? also, since we are both on my health insurance, and if opening an hsa is indeed allowable for me, should there be two hsa accounts open, one under my name and one under my wife's name, or does one account cover all of the participants of the plan? thank you again so much, really appreciate all the advice and help.

[BillM223]

Your spouse cannot contribute to your HSA because of Medicare, but you can distribute funds to your spouse (seems odd, but this is how it works) for qualified medical expenses.

There is no point to your spouse trying to open an HSA since your spouse can't contribute to it.

One HSA can "cover" (i.e., you can pay for expenses for) you, your spouse, and any dependents.

So, stuff as much money as you legally can into your HSA, use your health insurance and Medicare as much as you can, then after you go off your employer health insurance, then use the HSA to pay for qualified medical expenses. You can keep and use the HSA for as long as there is money in it.

[dimi1927]

amazing info, advice, and help. thank you a million times over. best advice and intel. you are the best!!!!

[dimi1927]

i have horizon blue cross blue shield of nj, direct access ppo with hsa compatible. i just checked the horizon member portal. they have something they call "Horizon MyWay HSA". Now I just need to figure out how to set it up.

[BillM223]

Good luck!

[dimi1927]

thank you!