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January 24, 2006
Have You Opened Your Health Savings Account for 2005 Yet?
There are thousands of people who have purchased a High Deductible Health Insurance Plan (HDHP) in 2005 and, for one reason or another, have yet to open a Health Savings Account (HSA) for tax year 2005.
HSA for America wants to remind you that April 15, 2006, which falls on a Saturday this year, is the last day that you can open and contribute to an HSA for the tax year 2005.
You must have had a qualified high deductible health insurance plan for at least one full month in 2005 to open an HSA and claim an HSA deduction for 2005. You must pro-rate your contributions by the number of full months you had the Health Savings Plan.
• You are not allowed to reimburse yourself for qualified health care expenses until you open a Health Savings Account, so whether you purchased your HDHP last year or it took effect 01/01/06 the most important thing to do next is to establish an HSA somewhere, so you can reimburse yourself going forward.
• Shop for the HSA that fits you. Make sure you compare the different HSA administrator fees. Some providers charge monthly or annual fees. Some even charge to use the debit card. These costs can add up.
• Always keep your receipts for your HSA qualified health care expenses.
• You can use your HSA a forced savings account, and continue to pay your health care costs out of pocket. There is no time limit for when you can reimburse yourself for your health care expenses; you just need to keep legible receipts and records in case you do reimburse yourself at a later date, or in case you are audited.
• You decide whether to spend from the account for your health care expenses and how much to spend, or whether to spend out-of-pocket and to save the HSA money for the future.
Visit HSA for America to find out all you need to know about Health Savings Accounts.
Posted by Wiley Long at January 24, 2006 09:24 AM