With the new tax bill that just passed many people are wondering how their HSA (health savings account) and FSA (flexible spending account) will be affected. The good news is that neither of these were affected by the new tax bill. The more important question for now is, do you understand how theses accounts can work for you?
HSA Accounts
- In order to enroll in a health savings account you need to have a high deductible insurance plan.
The deductible needs to be at least $1,350 for individual coverage and $2,700 for family coverage. Some plans have a high deductible but they charge a copay for office visits. These plans do not qualify for an HSA. You also need to have an out of pocket maximum of no more than $6,650 for individual coverage and $13,300 for family coverage.
- You can not have medicare and contribute to a HSA
If you had an HSA before enrolling in Medicare you can use it for health saving qualified medical purchases. If you are 65 or older you can use it for Medicare premiums but not medigap insurance premiums. You also have the option to use it as a traditional IRA.
FSA Accounts
- Health FSAs are employer-established benefit plans
If you are self employed you can not sign up for this type of plan, but if you have Medicare and are still working, you can sign up for this type of plan. The contribution for 2018 is $100-$2650. There are different types of accounts that are available. There is a Health Care FSA and a Limited Expense Health Care FSA . The regular Health Care FSA can be used on approved medical expenses. Here is a list of what it can be used on. The Limited Expense Health Care FSA is a flexible spending account option if you are enrolled in a Federal Employees Health Benefits (FEHB) high-deductible health plan (HDHP) and have a Health Savings Account (HSA). This option is also available if your spouse is enrolled in a non-FEHB, HDHP and has an HSA.
- How to use my FSA
As long as you have a qualifying expense you can start using your benefits at the beginning of the year. With this account you want to spend all the money or you will lose it. There is a provision that you can roll over $500 to next year, or you may have up to an extra 2 1/2 months to use up the money if your employer allows it. That is something you would want to ask your employer so that you know your options. With this account if you have Medicare you can not pay for Medicare premiums with this money.
You can spend your FSA money on medical expenses for your spouse, children or any other qualifying dependent you claim on your taxes. If you have grown children on your health insurance plan but don’t claim them as dependents, you can still spend FSA money on their medical expenses if they will be 26 at the end of the current plan year, usually Dec. 31.
Please check with your accountant for advice on the plans will work for you.
Even though it is the start of the new year you may still be able to use the rest of your FSA. We are one of the options that you could use so you don’t lose the money. At Hollowbrook Foot Specialist we have orthotics, both custom and over the counter, extra wide shoes and sneakers, braces, pads and even creams for your feet that you can use with your FSA. Give us a call at(845) 298-9074 and let us know how we can help
