Could I enroll now and immediately start using the FSA or HSA? I would like to get braces. Also, if I enroll in an FSA, what happens when you switch jobs?
@@TiarraEss If you enroll now for 2022, you would not be able to use the funds until 2022 when they start deducting the amount from your paycheck. For switching jobs, you generally still have until the end of the tax year to use up funds from the FSA account, but you will want to check with your HR department on any specific rules they have.
Biggest lesson i learnt in 2023 in the stock market is that nobody knows what is going to happen next, so practice some humility and low a strategy with a long term edge.
Nobody knows anything; You need to create your own process, manage risk, and stick to the plan, through thick or thin, While also continuously learning from mistakes and improving.
Uncertainty... it took me 5 years to stop trying to predict what bout to happen in market based on charts studying, cause you never know. not having a mentor cost me 5 years of pain I learn to go we’re the market is wanting to go and keep it simple with discipline.
“NICOLE ANASTASIA PLUMLEE’’ is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Yeah, they can be a bit confusing at first. The main difference is that an HSA is tied to a high-deductible health plan (HDHP), and you can roll over the funds year after year. An FSA, on the other hand, is usually a “use-it-or-lose-it” deal, where you have to spend the money within the plan year.
That’s right. I learned the hard way a few years ago when I didn’t use all my FSA funds and lost a chunk of money. Since then, I’ve switched to an HSA, and I love that I can carry the balance over. Plus, the funds in an HSA can be invested, which is a nice bonus.
I’ve been using an HSA for a while now, and I agree-it’s a great option, especially if you’re healthy and don’t have a lot of medical expenses each year. The tax benefits are also better with an HSA since contributions are tax-deductible, and withdrawals for qualified expenses are tax-free.
Both FSAs and HSAs have tax advantages, but the flexibility of an HSA is what sets it apart for me. I’ve been able to build up a decent amount in my HSA over the years, and I feel more secure knowing it’s there for future medical expenses, or even as another way to save for retirement.
If you know you’ll use up the funds in a year, an FSA could work well. But if you’re thinking long-term and want the option to save and invest, the HSA might be the better choice.
I have both! One for dental and vision and the other for medical only. The HSA for medical and a Partial FSA for dental and vision. I save a lot on taxes by doing both
i think it is still depend, for example my case that I have a young kid and my wife is pregnancy's I will definitely spent a lot of money on medical so I should choose a plan that cost less than high deductible plan to eligible for HSA. so I could of save a lot more money
Hi @shaderrrr1 - Sorry, for compliance reasons, we are unable to provide financial or investment advice. If you are interested in hiring a financial advisor, feel free to set up a discovery call here - districtcapitalmanagement.com/schedule-call/
Most dont qualify for either. A qualifying plan for HSA is really just a bad health insurance plan bc a high deductible means coverage is limited, and you'd be on the hook for the whole deductible if you had a major medical episode, which could be as much as $6,000.
@mellowc Thanks for your question. You can either contribute via one lump sum (which could be at the beginning of the year), set up Direct Deposit from each paycheck, or schedule a recurring monthly deposit via your own bank account. Once the funds are deposited into your HSA, they are available for immediate use. Thanks!
Question about FSA. I usually budget every year with that I plan on use my FSA for. If I'm still not sure on the amount to contribute, is it bests to just max it out? You said the higher the contribution the lower the taxable income.
Yes, I would recommend that you look at the most up to date HSA FSA qualified expenses list. Here is a good overview: www.cigna.com/individuals-families/member-guide/eligible-expenses Have a great day!
I have HMO insurance w a High deductive plan of $3,000 w my employer. per IRS it looks like i'm eligible for an HSA because my deductible is $3k (consider high) however my plan does not specify is HSA eligible from my employer. Question: Can I still have an HSA from any other provider such as fidelity to contribute now and use the tax benefits for 2021?!
To determine if your health plan is considered a High Deductible Health Plan (HDHP), you can review the plan documents or contact your health insurance provider directly. Here are some steps you can take to find out: Review Plan Documents: Start by reviewing the summary of benefits or plan documents provided by your health insurance provider. These documents typically outline the details of your health plan, including the deductible, out-of-pocket maximum, and coverage details. Look for information that indicates whether the plan qualifies as an HDHP. Check the Deductible Amount: HDHPs have higher deductibles compared to traditional health plans. The deductible is the amount you must pay out of pocket before the insurance coverage kicks in. If your plan has a higher deductible than the minimum threshold set by the Internal Revenue Service (IRS), it may qualify as an HDHP. Verify HSA Eligibility: HDHPs are typically paired with Health Savings Accounts (HSAs). HSAs are tax-advantaged savings accounts that allow you to contribute pre-tax dollars to cover qualified medical expenses. If your plan is eligible for an HSA, it is likely an HDHP. Check if your plan meets the IRS requirements for HSA eligibility, including the minimum deductible and out-of-pocket maximum limits. Consult Your Insurance Provider: If you are still unsure whether your plan qualifies as an HDHP, reach out to your health insurance provider's customer service or contact a representative who can provide you with accurate information. They can clarify whether your plan meets the criteria for an HDHP and answer any specific questions you may have.
Hi Veronica, you easily open an HSA directly through an HSA provider. There are actually many options. Look for ones where you'll have the ability to invest in stocks. We advise clients on this, if that's something you're interested in. districtcapitalmanagement.com
I have two: One with Fidelity (for investment) and one with my local bank (for saving/quick access). I roll money over from my savings/clearing-house HSA to my investment HSA exactly once per year (the maximum number of times for me) so that the money in my savings HSA is not less than my health insurance policy's annual out-of-pocket maximum plus a buffer. If you do likewise, make sure to ask for a roll-over (exactly the terminology) and that you will not have your savings account closed, incur any penalties or deleterious tax implications, etc. Also, make sure that you do not contribute more than the annual maximum to your HSAs in total; a roll-over should not count toward that (only new contributions will), but you should explicitly check.
With FSA's you "use it or lose it" if you dont use all your contributions in your current year. HSA's carry over. Plus good tax deduction when you contribute AND when you pay for medical appointments, copays or meds using the HSA for the SAME money. If you are an independent contractor or self-employed, that is cool. If you are an employee, you lower your tax burden.
Yes, you can take an HSA while your wife takes an FSA, provided that you both meet the eligibility criteria for each account type. However, it's advisable to consult with a financial advisor, as they can provide personalized recommendations on which accounts suit your needs and circumstances best. Have a great day!
Expenses related to surgery are generally considered eligible for reimbursement from a Health Savings Account (HSA). HSA funds can be used to pay for medical expenses that are considered deductible under the Internal Revenue Code Section 213(d). This includes expenses for the diagnosis, cure, mitigation, treatment, or prevention of disease or for the purpose of affecting any structure or function of the body. Surgical procedures, including the costs associated with the surgery itself, such as surgeon fees, anesthesiologist fees, hospital charges, and other related expenses, are typically considered eligible expenses for HSA reimbursement. However, it's important to note that cosmetic surgeries that are solely for aesthetic purposes and not for the treatment or prevention of a medical condition are generally not considered eligible for HSA reimbursement. As with any HSA expense, it is important to keep documentation of the surgical expenses, such as itemized bills, receipts, and any other supporting documents, for tax purposes. It's also recommended to consult with a tax professional or refer to the IRS guidelines to ensure that specific expenses meet the eligibility criteria for HSA reimbursement.
1) You are not taxed on the contributions you make into an HSA account, as this is your pre-tax funds going into the account. 2) Health SAVINGS account balances can grow based on the investments and interest rates you have with your provider, and the gains you make are tax-free 3) Qualified withdrawals and expenditures are also tax-free (you're not taxed if you take out your money for a qualified reason).
Thanks for your question. To change your Health Savings Account (HSA) provider from PayFlex to a different provider, you'll typically need to go through your employer, as they are the ones who establish and manage the HSA program for their employees. Have a great day!
Thanks for your question. The dependent care FSA can only be used for childcare costs. However, you can use the funds in your FSA to pay for certain medical and dental expenses for your dependents.
It shouldn't be any different, though it may depend on what the reimbursement is for. You may want to ask your FSA/HSA company for clarification on what is needed. Reimbursement itself would usually go to a US bank account. My co-worker used her former dependent care FSA for an off-base Japanese pre-school and had no issues with reimbursement.
Sorry if I missed it but you mentioned that you treat your HSA as a retirement vehicle -- does that means we can withdraw for non-healthcare expenses as long as it's after retirement age? Thanks
Hi Oliver! After age 65, you can withdraw funds from an HSA for any reason with no IRS penalty. You will still pay ordinary income tax on any withdrawals that are not used for medical expenses.
I unfortunately switched from FSA to HSA last year (2022). Since the year for the market was a disaster I lost a lot of money. My suggestion is not to use a very risky tool such as HSA. You can lose all of your contributions instead of getting the solid amount as a return from FSA.
Do I get the money back for the year in Healthcare FSA through employer if I havent used any of it? Or does it automatically goes towards next year? @DistrictCapital
The rules regarding the use of funds in a Healthcare Flexible Spending Account (FSA) can vary depending on your employer's specific policies. Typically, funds contributed to an FSA are subject to a "use-it-or-lose-it" rule, meaning that any money remaining in the account at the plan year's end is forfeited. However, there are some exceptions and options that may apply: Grace Period: Some employers offer a grace period that allows employees to use the funds remaining in their Healthcare FSA for a certain period after the plan year ends. This grace period is typically up to two and a half months. If your employer provides a grace period, you would have extra time to utilize the funds for eligible healthcare expenses incurred during that period. Rollover: Another option available to employers is the rollover provision, which allows a portion of unused funds to carry over into the next plan year. The maximum amount eligible for rollover is typically $500, but this may vary depending on the employer's plan design. If your employer offers the rollover provision, the unused funds, up to the maximum allowed, would be carried over into the next year and added to your new FSA balance. Limited Grace Period or Rollover: Some employers may provide either a grace period or a rollover provision, but not both. In such cases, it's important to understand your employer's specific rules and limitations. To know the exact details about how your Healthcare FSA works and whether there is a grace period, rollover provision, or any other specific rules, it's best to consult your employer's benefits department or refer to the plan documents they provide. They will be able to provide you with the most accurate information regarding your specific FSA and its policies.