Living Well

Compound It! How HSAs can benefit single moms

It's one of the first signs of spring and the first sign that school is almost out and that summer is on its way: Mother's Day.

Every year, Mother's Day cards say the same thing: how amazing, selfless and nurturing mothers are. And rightfully so - mothers give so much of themselves to raise, protect and help their children fulfill their dreams.

But being a mother is no easy feat and not something that can be summed up in a Hallmark card. It's a trying job, even more difficult if you're doing it on your own. Single mothers make up 25% of all American families and they need and deserve special consideration.

Why an HSA can help

If you have a high-deductible health insurance plan (HDHP), you're eligible for a health savings account or HSA. Contributions to an HSA are tax-deductible so every dollar you contribute will reduce your taxable income.

HSA withdrawals are also tax-free if you use them for qualified medical expenses, which include doctor's visits, prescriptions, lab work and other services and procedures. Earnings from your HSA also aren't taxed.

You can open an HSA by yourself, but your employer may also provide an HSA. Some even contribute money to your HSA as a way to encourage employees to choose qualified HDHPs.

You can pay for your own medical expenses and your child's with an HSA if you claim that child as a dependent on your taxes. If you and the other parent take turns claiming the child as a dependent, you won't be able to pay their medical expenses from your HSA if you're not claiming them that year.

However, your child doesn't have to be under your own health insurance plan. If your child has insurance through Medicaid or their other parent's health insurance, you can still pay their medical expenses with your HSA if they're otherwise eligible.

Your child has to be under your insurance plan if you want to contribute the family limit to your HSA (that's $7,000 in 2019). If your child is on a separate plan and you participate in the health plan on your own, you may only contribute the individual maximum of $3,500.

Open a DCFSA to extend the benefits

If you have an HSA, you can also open a dependent care flexible spending account (DCFSA), which works like a savings account specifically for qualified childcare expenses. You can contribute a $5,000 max amount to your DCFSA every year if you are married and file a joint or single tax return and $2,500 if you're married but filing separately.

You can use funds in a DCFSA to pay for babysitters, nannies, camp, aftercare and related expenses that allow you and your spouse to work or go to school full-time. This is only available for children below the age of 13 or adults who are your tax dependents and who live with you and physically rely on your care.

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Compound It! is your update of achievable, effective, no-nonsense HSA saving and investment advice, delivered by people who make it work in their own lives. For the latest info about your health and financial wellness, be sure to check out the HSA Learning Center, and follow us on Facebook and Twitter.

Retirement

Future Healthy: Funding your HSA over other retirement plans

Investing is about starting early and contributing often. Due to the magic of compound interest, a small amount invested today can end up being more valuable than a larger amount invested ten years from now.

But making the most of your contributions is about investing smartly. You need to prioritize where your hard-earned money goes, so you can maximize the earning potential of your portfolio. If investing is like planting an orchard in the hopes of one day collecting apples, investing smartly is like choosing the most fertile soil.

Of course, we're not financial pros, so be sure to consult with a licensed professional before making any decisions about your own finances. But based on our own experiences, here's where we think HSA contributions fit into the mix.

Figure out your priorities

When it comes to investing, there's only one thing you absolutely need to prioritize over starting an HSA: take advantage of any matching contributions in your 401(k). If your employer has a sponsored retirement plan, you should contribute enough to get the match. If they match 100% up to 5% of your salary, you should consider contributing 5% of your salary before starting an HSA.

Matching contributions are free money you can't get back. No matter how enticing an HSA is, you should probably get the matching money first.

Why you should prioritize HSA contributions

When choosing a dedicated retirement plan, you usually have to pick between a Roth IRA or traditional account. A Roth account allows users to withdraw money tax-free in retirement, while a traditional account lets investors deduct contributions on their taxes.

Deciding between a Roth and traditional account can be a complicated decision, but that's where an HSA comes in. An HSA combines the two best elements of a Roth and traditional retirement account.

Contributions to an HSA are tax-deductible, no matter your income bracket. Withdrawals are tax-free, and you don't have to wait until a certain age to take money out of an HSA.

This latter benefit is especially valuable for those who retire before they're eligible for Medicare. Healthcare costs can be extremely expensive for early retirees, so having money in an HSA will offset those costs.

You can also invest funds in your HSA just like you would invest an IRA or 401(k). You can pick from a variety of HSA providers, many of whom have low trading fees and a large list of investments. Earnings from those investments will also grow tax-free.

After you turn 65, you can use funds in an HSA for any purpose. You'll just pay income tax based on your bracket, similar to a traditional retirement account.

One notable downside

When you have an IRA or 401k, you can withdraw the money in retirement for any purpose. You can use it to pay for a vacation, donate to charity or splurge on presents for your grandkids.

Money in an HSA can only be used for qualified medical expenses. Even the earnings that come from investing your HSA should still be used for those IRS-sanctioned expenses. That's the only downside to prioritizing your HSA over other retirement accounts, although your medical expenses in retirement will likely be significant enough to justify a well-stocked HSA.

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Whether it's for covering medical expenses, or planning bigger investments, our Future Healthy column will help support your path to retirement, no matter where you are on the journey. And for the latest info about your health and financial wellness, be sure to check out our HSA Learning Center, and follow us on Facebook and Twitter.

Basics
Photo by Esther Tuttle on Unsplash

Compound It! What new college graduates should know about health insurance

Graduating from college is an exciting experience. It's the one of the first times one feels like a real adult. No longer are they living within the shadow of their parents, or under the watchful eye of their university. Now, they can make their own decisions.

And choosing a healthcare plan is a big one. Picking a health insurance option can be overwhelming and complicated without the right information, especially if their parents have always taken control of their medical expenses. Well, we have that info. Here are a few things new grads need to look for so they don't start off adulthood on the wrong foot.

Look beyond the premiums

When you're examining your healthcare options, the first number you'll notice is the premium or the monthly payment. The premium is what you pay for having health insurance, but it's just the starting figure. Here's what else you should look at:

  • Copay: This is how much you'll pay upfront when you visit the doctor's office.
  • Coinsurance: This number shows what percentage of the bill will be your responsibility. This will be charged instead of or in addition to the copay.
  • Deductible: The deductible is how much you'll pay by yourself before insurance kicks in 100%. You could have a deductible and a copay or coinsurance post-deductible.
  • Out-of-pocket max: The out-of-pocket max is the most you'll pay in one year.

Grads also need to know how to pick the right doctor or hospital ahead of time. Every insurance plan comes with its own list of acceptable doctors and not every physician will be in the network. Some insurance plans, like HMOs, don't even cover out-of-network visits. That can turn a $50 appointment into a $500 burden.

Consider a high-deductible health plan

For most college graduates, this will be the first time they've had to pick a health care plan, previously relying on their parents. In the sea of health insurance jargon, it may be tempting to pick the cheapest plan. Fortunately, that's often the best choice.

Recent grads are mostly healthy which means they don't need an insurance plan that costs more than their student loans. To save the most money, they should consider a high-deductible insurance plan which will have the lowest premiums.

Because a 22-year old likely doesn't have the arthritis or blood pressure issues that a 50-year old does, they can afford to sign up for the cheaper plan. When they need to visit a doctor, they'll pay more, but the cost will even out over the course of a year.

A high-deductible plan also lets them contribute money to a health savings account (HSA). Contributions to an HSA are tax-deductible which will reduce how much they owe in taxes. Plus, HSA funds roll over from year to year, making it a rainy day fund for health problems.

This strategy only works if you're truly healthy. If you have a chronic health condition, like type 1 diabetes, you should probably go with a low-deductible plan.

Don't avoid picking one

It's easy to get overwhelmed when surrounded by pamphlets and employee handbooks. But don't procrastinate. Open enrollment for healthcare only lasts for a couple months after which it's too late to pick a plan. Plus, under the Affordable Care Act, you'll pay a steep penalty if you don't have health insurance. Talk to your HR rep if you're confused about your options.

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Compound It! is your weekly update of achievable, effective, no-nonsense HSA saving and investment advice, delivered by people who make it work in their own lives. For the latest info about your health and financial wellness, be sure to check out the HSA Learning Center, and follow us on Facebook and Twitter.

Accounts
Photo by Robbie Weaver on Unsplash

Compound It! Using your HSA for caregiving

As the Baby Boomer population continues to age, many of them are having to rethink their living situations. Some are transitioning to senior living centers, some are choosing retirement communities, and others are renovating their homes to be more suited for their needs.

But another subset of the population is leaning toward another option: moving in with their children. For adult children, taking care of their parents can be extremely fulfilling, especially if they're in their later years.

Fortunately, caregiving can be extremely financially rewarding too, with little-known tricks that people can take advantage of. Read on to see how an HSA can be used to save and prepare for caregiving expenses, now or in the future.

First, the basics

There are several rules and limitations regarding using an HSA for caregiving, which must be followed to the letter. First, your parent must be your dependent, per the definition set by the IRS.

To be eligible for dependency status, the parent must be a resident or citizen of the U.S. or a resident of Canada or Mexico. They must be your biological or adopted parent. Foster parents are not eligible to be claimed until they have lived as part of your household for at least one year.

If your parent lives with you full-time and you provide more than half of their financial support, then they may qualify as an official dependent that you can claim on your taxes. Your parent has to report that they're a dependent when they file their own taxes. Your parent also cannot have more than of $4,050 in gross income, which fortunately excludes Social Security benefits.

Just like other HSA rules, you can only spend HSA funds on qualified medical expenses. For example, if your mother gets prescribed a medication that's not completely covered by Medicare, you can pay for it out of your HSA (provided your mother is a qualified dependent as discussed above). If their doctor recommends home health products, you can buy them with HSA money, too.

You can't spend HSA money on non-qualified expenses, even if they relate to your dependent parent. Anything you purchase with your HSA card still has to fall under HSA eligibility guidelines; you can find a list of some eligible items here.

The tax benefits of caregiving

If you've previously been paying for your dependent mother's diabetes medication out of pocket, you'll find a nice tax bump once you start using your HSA.

The best way to save on your taxes if you're taking care of your qualified dependent parent is to contribute the maximum to your HSA. Currently, the limit is $3,450 a year for those participating in the health plan as an individual and $6,900 a year for those participating in the health plan as family. If you're 55 and older, you can contribute an extra $1,000 annually.

Remember, you still need to have a high deductible health plan (HDHP) to use an HSA. You can't open one just to take advantage of caregiving expenses if you don't have an eligible health insurance plan. Currently, the requirement for an HSA-qualifying plan is a deductible between $1,350 and $6,650 for individuals and between $2,700 and $13,300 for families.

Before you sign up for an HDHP, do the math to make sure you won't pay more out of pocket. It's not worth saving $200 on your taxes if you'll spend thousands more overall.

If your parent is on Medicare, they can't open their own HSA plan. The same eligibility rules that apply to all HSA participants apply to them. If they have a previous HSA that still has money in it, encourage them to spend that down before using your own funds.

Compound It! is your weekly update of achievable, effective, no-nonsense HSA saving and investment advice, delivered by people who make it work in their own lives. For the latest info about your health and financial wellness, be sure to check out the HSA Learning Center, and follow us on Facebook and Twitter.

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Eligibility

Wage Up: How athletes can benefit from an HSA

Athletes are no strangers to the medical world. They frequently get injured and usually have a doctor on speed dial. They know the difference between a serious injury and something that'll go away with ice and rest.

But many of them aren't aware that they can use an HSA to save money on doctor's visits, sports injury supplies and more. Having an HSA can help them save on their taxes while ensuring they've always got money stashed away in case of an ACL tear or sprained ankle.

Doctor's visits

Tweaked your knee training for the marathon? Use your HSA to pay for a visit to a physical therapist or sports medicine doctor. Any medical professional you visit is eligible under your HSA (provided that the service you receive is eligible as well). You can also use your HSA for specific travel expenses such as reimbursement of medical mileage related to a doctor's visit, especially useful if you're visiting a specialist whose office is 45 minutes away.

If you need extensive surgery or rehab after a sports injury, consider maxing out your HSA. Currently, the annual contribution limit is $3,450 for individuals and $6,900 for families. Paying for ACL repair surgery with your HSA will take the sting out of the operation, since you'll get a nice tax deduction at the end of the year. If you frequently get injured, think about contributing a set amount each month to your HSA so you're always prepared.

Massage and acupuncture

If your doctor recommends massage or acupuncture for a lingering injury, you may be able to use your HSA to pay for it (unfortunately massages just for relaxation won't qualify). The doctor must write out a plan of care that includes massage or acupuncture, and they need to highlight why it will help.

Chiropractor visits also fall under HSA rules. In both cases, you'll want to hold onto these doctors notes just in case it's needed to prove the expense was indeed eligible.

Supplies

Athletes who train frequently go through a lot of supplies, many of which are qualified medical expenses. If you need sports tape, ibuprofen (Rx required) or an ice pack to relieve your latest injury, visit HSAstore.com. Common sports-related purchases that are also eligible for HSA reimbursement include braces, straps, crutches and compression socks.

Sports psychology

If you're suffering from burnout or performance anxiety, a visit to a sports psychologist can clear your head. Fortunately, mental health is covered by HSAs. You can see a psychologist, psychiatrist or licensed clinical social worker. Any anxiety or depression medication recommended by the physician will also fall under your HSA's purview.

How to get expenses reimbursed

You can use your HSA debit card directly to pay for qualified medical expenses or you can use another account and reimburse yourself later. Remember to keep all relevant receipts in case the IRS asks you to prove those expenses were HSA-eligible.

You might even want to scan them digitally since many paper receipts will age quickly and become illegible. Store receipts on a secured cloud server, so you can always find them easily. Your doctors will also usually keep copies of records, though you shouldn't rely on them exclusively.

What you can't use an HSA for

Unfortunately, not every athletic endeavor can be paid for with an HSA. Gym memberships, protein powders, nutritional supplements and private trainers are almost always off-limits, unless your doctor or medical professional has specifically prescribed them to fix a medical condition.

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Whether you're spending steadily or saving for something, Wage Up! is where we highlight the latest services available to buy with your HSA, every Monday on the HSA Learning Center. And for everything else about your health and financial wellness, be sure to follow us on Facebook and Twitter.

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Eligibility

Wage Up! Is it allergies or acid reflux?

For most of my 20s, my husband assumed he had allergies. He woke up almost every morning with a stuffy nose and mucus running down the back of my throat, and no amount of allergy medication seemed to make a difference. Eventually, he was referred to an ENT for a closer look.

As it turns out, he didn't have allergies. What he actually had is a particular type of acid reflux with symptoms almost identical to allergies. After experimenting with some dietary supplements and making a few lifestyle changes, his symptoms have almost completely disappeared.

Of course, we're not doctors, and aren't providing medical advice, just our own stories. Always see a physician to get the right medical advice for your needs. But if you have stubborn allergies that never seem to get better, read ahead to see how we learned that these symptoms were actually acid reflux - and how we paid for treatment with our HSA.

Why acid reflux sometimes looks like allergies

There are multiple types of acid reflux, with the most common symptoms being heartburn, acid in the back of your throat, stomach pain and bloating.

But one type of acid reflux, known as silent reflux or Laryngopharyngeal reflux (LPR), has a much different - and often confusing - set of symptoms. These include post-nasal drip, excess mucus and a sore throat. If that sounds a lot like seasonal allergies or hay fever, you'll understand why so many people misdiagnose themselves.

One key difference between allergies and acid reflux is that the latter won't cause sneezing, itchy eyes or a runny nose. If you're experiencing symptoms and aren't sure whether you have allergies or LPR, make an appointment with your primary care doctor to get an accurate diagnosis.

How to use your HSA to douse those acid reflux flames

You can use your HSA funds to pay for a doctor's appointment and any tests they may order. Some doctors may order an endoscopy to determine the amount of esophageal damage that's been done. Others may refer you to a gastroenterologist.

Much of the time, silent reflux can be alleviated by avoiding food right before bed, limiting alcohol and chocolate, sleeping with an elevated torso and eating smaller meals.

You can buy a wedge pillow to prop your head up at night. Having your head higher than your throat will prevent acid from backing up into your throat.

Unfortunately, those strategies aren't always enough. A doctor may suggest taking an antacid after eating to prevent any problems. Your HSA provider will only cover over-the-counter medications if a doctor writes a prescription for them.

If your doctor tells you to take an antacid without writing a script for it, you can't pay for it with an HSA. But if you get a prescription for anything your doctor recommends and keep a copy for your HSA records.

If antacids aren't strong enough, a physician may prescribe a proton pump inhibitor (PPI) such as Prilosec. Your HSA may be used for any prescription medication your doctor orders.

Patients who develop serious symptoms but aren't able to take medication may benefit from surgery to strengthen the esophagus and prevent more damage from occurring. This only happens in rare cases if medication and lifestyle changes don't fix the LPR.

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Whether you're spending steadily or saving for something big, Wage Up! is where we highlight the latest services available to buy with your HSA, every Monday on the HSA Learning Center. And for everything else about your health and financial wellness, be sure to follow us on Facebook and Twitter.

Eligibility

Wage Up! Clearing up confusion about acne treatment and your HSA

Just about everyone has to deal with acne at some point. For some of us, it happens during our fragile teen years. For some of us, it persists into adulthood - but one thing never changes: dealing with acne can be frustrating, painful and just downright embarrassing.

But while acne hasn't been cured quite yet, acne treatment has improved by leaps and bounds. If you're willing to experiment a bit, chances are you can find a product that works for you.

Since spring is a few weeks away, let's act quick to get ahead of acne before the warm weather breaks. Here are some of the most-effective acne treatment options - and how your HSA might be able to help.

Light therapy

Light therapy is an acne reduction system that uses special light to kill bacteria-causing acne. Blue-light kills bacteria that causes acne, while red light reduces inflammation. The lights may also reduce sebaceous glands responsible for producing oil. Light therapy can be used for acne that doesn't respond to other treatments or for people who want to avoid prescription creams like Accutane.

Dermatologists offer a more powerful version of light therapy in-office, far stronger than what you can buy at the drugstore. These visits can be costly, however - usually between $100 and $400 a session depending on your doctor and insurance. Buying an at-home light therapy kit is much more affordable, and easier for teens and young adults with limited access to regular dermatologist visits.

Light therapy treatments are easy to use. Most of them are small handheld devices, while a few attach directly to your face. You keep the light on for a few minutes per session, and each system has its own suggestion of how frequently it should be used.

Light therapy kits are HSA-eligible, and you don't need a prescription from a dermatologist or doctor. The kits start as low as $19, but the high-end ones can cost as much as $399.99. The Neutrogena Light Therapy Acne Treatment Mask is one of the most highly-reviewed options and only costs $39.99. You can buy them from HSAStore.com, directly from the manufacturer or at a drugstore.

You can also use your HSA card to pay for light therapy treatments from your dermatologist.

Cleansers, gels and creams

Many over-the-counter creams, gels and cleansers are capable of reducing and preventing acne, especially for those with mild symptoms. These products must have a prescription from a doctor to be a qualified medical expense and HSA-eligible.

To get a prescription for one of these creams, you need to visit either a primary care physician or a dermatologist. Ask them to write a prescription for the exact item you want, after which you can buy the medication with your HSA card. Make sure to take a photo of the prescription or make a copy of it in case you need to prove it was a qualified medical expense.

If you do visit the doctor and get a prescription for an over-the-counter acne product, you can always use an HSA card to pay for the visit.

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Whether you're spending steadily or saving for something big, Wage Up! is where we highlight the latest services available to buy with your HSA, every Monday on the HSA Learning Center. And for everything else about your health and financial wellness, be sure to follow us on Facebook and Twitter.

Eligibility

Wage Up! When you use your HSA card incorrectly

One of the best things about having an HSA is how easy they are to use. You just carry the card around in your wallet and use it to pay for eligible expenses, so it's really not any different from making a normal purchase. That's where people run into trouble - myself included. Here's my story.

Last year, I used my HSA card to pay for a 50-inch smart TV. Here's how it happened and what I did to fix it.

My story begins when I bought some contact lenses online at a large wholesale club, where I usually get my annual eye exam. When I went to pay with my HSA card, I saved the credit card under my account, hoping that next time I bought contacts, I wouldn't have to dig out my HSA card.

A few months later my husband and I were shopping around for a new TV. We found a model we liked on the store's website, so I bought it immediately. I was so excited that I forgot to check my payment settings.

A couple weeks later when I was reviewing my HSA, I noticed a $350 pending transaction. I didn't remember paying a medical bill that high, so I was pretty confused. Had someone hacked into my account? Did a doctor's office have my HSA card on file and bill me for a visit?

It wasn't until the payment posted that I realized what I'd done. I had used my HSA card to buy a TV.

I doubt I'm the first person to use my HSA for a large ineligible purchase. HSA cards look just like regular credit cards, so it's easy to get them mixed up in your wallet or accidentally save them to an online retailer. Honestly, I'm surprised this is the first time it's happened to me.

How to fix it

Unfortunately, you can't just let mistakes like this slide. You can be charged a 20% penalty if you use your HSA funds to pay for a non-qualified medical expense, which would have been $70 in my case (not to mention traditional income taxes would apply, too).

A simple way to fix this problem is to pay for a qualified medical expense of the same amount with your debit or credit card and keep the receipt. This way the amounts will cancel each other out.

That's what I did. A week after my mistake, my husband had a physical therapy visit that I used our regular credit card to pay for, which negated my TV transaction.

If you catch the transaction early enough, you might be able to contact the retailer and ask them to reverse the charge and fill it on a new card. If you bought something in person, you can also return it to the store and then buy it again with a different card.

Whichever route you choose, keep thorough records in case the IRS starts asking about a "funny-looking" charge.

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Whether you're spending steadily or saving for something big, Wage Up! is where we highlight the latest services available to buy with your HSA, every Monday on the HSA Learning Center. And for everything else about your health and financial wellness, be sure to follow us on Facebook and Twitter.

Accounts

Compound It! Share the love - how mid-year weddings affect HSA contributions

It's Valentine's Day and love is in the air! The "season of love" sounds like a metaphor, but it's actually a concrete time period. Almost half of all married couples get engaged between Thanksgiving and Valentine's Day, and most weddings take place between June and September.

But while mid-year weddings are ideal weather-wise, mid-year marital status changes add a layer of complexity to your HSA situation. Read on for some things you might want to know about life-changing events.

The bigger picture...

If you have an HSA-eligible HDHP, get married in the middle of the year and your spouse joins your health plan, you'll be able to contribute the family contribution limit of $7,000 instead of the individual limit of $3,500. This also applies if your new spouse has their own high-deductible plan with an HSA.

This means you'll be able to get a bigger tax break, because you can contribute twice as much to your HSA and then deduct those contributions. The contribution limits change every year, so make sure you're always putting away as much you can.

How married couples can contribute to an HSA

Unlike a bank account, there's only one owner of an HSA. You and your spouse can each open your own or both make contributions into the single account.. If you have two accounts, you can divide contributions in a few different ways. One person can contribute all of the limit in his or her account and you can divide it 50/50 or split it by any other percentage. The IRS doesn't care which method you choose.

Be sure to track how much you're each contributing to the HSA. If you go over the contribution limit, you'll pay a 6% fee on the excess. Some HSA providers will visibly show how much you've contributed already, while others make you do the math yourself. You can simplify the process by automating your HSA contributions on a monthly basis so you never add more than the limit.

Account holders can add an extra $1,000 per year if you're an account holder 55 or older, because it counts as a catch-up contribution. This bonus is available every year they have an HSA-eligible insurance plan. Once they switch to Medicare, they'll no longer be able to contribute to an HSA and you'll have to go back down to the individual limit.

Any money saved in an HSA before you got married or before your spouse joined the HSA plan can be used on their eligible expenses.

If your spouse leaves your plan...

If your relationship status changes from married to single or if your spouse loses his or her coverage under the qualified health plan, your contribution limit then changes based on when the coverage changed.

Let's say you and your husband are on the same insurance plan when the new year begins, but in August he gets a new job and switches to a non-HSA plan. Your annual contribution limit now changes, and you have to determine the new total contribution limit.

We're not tax or financial advisers and you would want to get some advice from a professional when figuring this all out. However you would typically take the annual contribution max, divide it by 12 and multiply that figure by how many months you both carried an HSA. The family annual contribution limit in 2019 is $7,000, so your new total limit would be $4,083.33 (based on 7 months of participating in the health plan as a family).

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Compound It! is your weekly update of achievable, effective, no-nonsense HSA saving and investment advice, delivered by people who make it work in their own lives. For the latest info about your health and financial wellness, be sure to check out the HSA Learning Center, and follow us on Facebook and Twitter.

Basics

Future Healthy: Managing and mastering your HSA receipts

These days, most people throw their receipts in the trash -- or decline to even have one printed at all. With checkbooks being phased out and digital budgeting becoming the norm, there's just no reason to keep the paper receipts from your everyday purchases.

But if you have an HSA, keeping your receipts is still important. You'll need to use them when you reimburse yourself for out-of-pocket purchases, or when the IRS wants to verify that you've only used your HSA for eligible items and services.

Since this column is focused on saving and planning for a healthier future, we felt it would be helpful to share our favorite setups for storing, organizing and sharing your HSA receipts.

My personal favorite ways to track and store receipts

Google Drive

Pros: Google Drive is easy and free to set up. All you need is a Google email address. It comes with 15 GB (a lot of receipts) of free storage, and you can pay a nominal fee to upgrade -- currently $1.99 a month for 100 GB (a lot more receipts). Android phone users can also use Drive for Android, which turns mobile pictures into PDF files for your Drive account.

Cons: Google Drive may be easily accessible, but if you don't set up proper precautions your information could be vulnerable.

[PRO-TIP: Set up two-way authorization and never log onto your account on a public computer. Because if someone hacks into your Gmail account, they'll also have access to your Drive.]

Dropbox

Pros: If you don't have a Gmail account (and don't want to set one up), a Dropbox account is probably your best bet for cloud storage.

Like Google Drive, Dropbox is a free storage platform that's easy to use and accessible on a variety of devices. You can also share your Dropbox documents with anyone, so your spouse or accountant can easily view your HSA receipts.

Cons: Dropbox's service is free for the first 2 GB and $9.99 a month for 1 TB (more receipts than your local pharmacy could print in a lifetime). That's considerably less space than Google Drive, so you could run out of room if you're using your Dropbox for other files.

Your HSA provider

Pros: Some HSA providers have their own receipt storage, allowing you to upload receipts for reimbursement. You may already have to provide proof to your HSA provider if you use out-of-pocket money to reimburse yourself from your HSA, so this option requires the least extra work.

Cons: Every HSA provider is different, and it's hard to say if their storage is more secure than a huge company like Google or Dropbox. It's also not clear how long they'll keep the receipts on file. If you switch HSA providers, you'll have to find a way to move them, which might involve downloading and then uploading them to your new provider.

Your computer

Pros: Storing your HSA receipts on your laptop or computer is easier and cheaper than keeping them on the cloud. You can reach them easily and don't need a password.

Cons: Storing vital data on your computer is like playing a game of chicken. If you don't backup your information and your computer dies, you'll lose access to your receipts. Plus, you can only view those receipts if you're at the computer.

In general, keeping receipts on your computer is only a good idea if you backup the data regularly. Even then, it doesn't beat the reliability of the cloud.

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Whether it's for covering medical expenses, or planning bigger investments, our Future Healthy column will help support your path to retirement, no matter where you are on the journey. And for the latest info about your health and financial wellness, be sure to check out our HSA Learning Center, and follow us on Facebook and Twitter.

Taxes

Tax Facts: How an HSA can lower your taxes each year

Now that this year's tax season is just about here, we figured this was the perfect time to think about lowering your taxes -- because we're pretty sure everyone wants to lower their tax bill. It's a national pastime -- hunting around for little-known deductions and credits that may decrease how much you owe at the end of the year.

But one method that people often forget about is your health savings account (HSA). Now that more people are joining high-deductible health plans (HDHPs), more people are eligible for HSAs. However, they're often not aware how saving money in an HSA can dramatically affect their taxes.

Let's try an example...

Say you want to lower your taxes and save for upcoming medical expenses. Here's how you can lower her taxes with an HSA, along with a quick look at the rules you need to follow.

The money you contribute to your HSA is non-taxable, just like it is if you contribute to a traditional 401(k), IRA or other interest-bearing account. When you contribute money to an HSA, it decreases your adjusted gross income (AGI) which determines your taxable income.

Since the U.S. runs on a tax rate system based on your income, the lower your AGI, the lower your tax bill.

If you're working as a W2 contract employee, you might be lucky enough to have an employer who contributes to your HSA. Employers are able to contribute to an employee's HSA without those funds counting as taxable income, unless it exceeds the HSA limit.

(In 2019, the annual limit for HSA contributions is $3,500 for individual health plan participation and $7,000 for family participation, while those 55 or older can contribute an extra $1,000 per year.)

Let's assume you have an insurance plan with a deductible of $2,500. In general, to qualify for the HSA deduction, a health insurance plan must have a individual deductible between $1,350 and $6,650 and between $2,700 and $13,300 for families.

But be careful -- if you contribute to an HSA when you're not eligible for one, you may have to pay some penalties to the IRS.

The benefits of contributing to an HSA

It doesn't hurt to contribute to your HSA, even if you're not sure you're going to need all your HSA money for that coming year. HSA funds roll over from year to year and can even be assigned to a beneficiary in the event of your death.

This money is also eligible for investment. If you have an excess of HSA funds, such as $2,000, you may be able to invest the money several ways, depending on your HSA provider. In some ways, that makes your HSA a back-up retirement account; this is perfect for people who have already maxed out their 401(k) and IRA.

When you withdraw funds from your HSA for qualified expenses, the money also comes out tax-free, a perk not available to other types of accounts. When you use a Roth IRA, you pay taxes on the contribution, but not on the distribution. If you have a traditional IRA, you don't pay taxes on the contribution, but your distributions aren't taxed.

By comparison, your HSA doesn't tax contributions or qualified distributions. Win-win, for everyone involved.

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Tax Facts is a weekly column offering straight up, no-nonsense HSA tax tips, written in everyday language. Look for it every Tuesday, exclusively on the HSAstore.com Learning Center. And for the latest info about your health and financial wellness, be sure to follow us on Facebook and Twitter.

Eligibility

Wage Up! Why I decided a gold health plan wasn't right for me

In 2018, I was diagnosed with a BRCA1 genetic mutation. In short, that means I have a significantly increased risk of developing breast and ovarian cancer. My grandmother died of ovarian cancer at 43, so the diagnosis wasn't entirely surprising.

I've decided to go the preventative surgery route - a double mastectomy and reconstruction, as well as double ovarian and fallopian tube removal. As you might have guessed, this route comes with a heavy price tag.

With that in mind, I set out to find the right insurance plan to cover those costs in 2019, settling on a high-premium Gold plan. Here's what I discovered when open enrollment started.

Why I wanted a Gold plan

When my husband and I moved back to Indiana last year, I had to sign up for health insurance through the marketplace. As I looked through the different plans, I noticed that the Gold-level plans had a much lower deductible and out-of-pocket max than the Bronze plans.

That's usually how health insurance plans work. You can either pay a low premium every month and have less of your expenses covered, or pay a high premium and have more covered. The Gold-level plans had a monthly premium of $1,000, while the Bronze plans had a $650 premium.

After doing the math, I realized I would save $3,000 if I went with a Gold plan. I decided that if I still wanted to get surgery in January, that was my best option. I ran the numbers over with my financial planner and he agreed.

What actually happened

When open enrollment for the Healthcare Marketplace became available in November, I immediately started signing up. That's when I discovered that the plans had changed - the Gold options had almost the same out-of-pocket max as the Bronze ones, give or take $50.

I was so confused. I called the Marketplace's customer service line and spoke to a representative who confirmed what I was seeing. She was just as baffled as I was. "That's so weird," she said. "Usually, the out-of-pocket max is lower on those Gold plans."

After re-doing the math, I realized I would spend $4,246 more if I went with the Gold plan. Plus, if I chose the right Bronze plan, I could have an HSA to pay for my expenses. That means I'd save even more with the Bronze plan by deducting those expenses on my taxes, approximately $1,500.

Why it pays to check

If I had gone with the Gold plan automatically, I'd be overpaying by almost $6,000 for the same coverage. I'm so glad I went through the plans carefully, even though I was so certain about what I wanted.

Choosing a health insurance plan isn't something you can do on autopilot. Premiums, out-of-pocket amounts and deductibles can change every year, so picking the same plan without checking is a dangerous game.

If your health needs have stayed the same, it's still a good idea to consider each available plan. Do the math yourself to see what makes sense. If you're like me, keeping an HSA-eligible plan might be more advantageous than having slightly better coverage.

Whether you're spending steadily or saving for something, Wage Up! is where we highlight the latest services available to buy with your HSA, every Monday on the HSA Learning Center. And for everything else about your health and financial wellness, be sure to follow us on Facebook and Twitter.

Eligibility

Wage Up! When healthcare needs interrupt your vacation

While my husband and I were visiting his parents in the Florida Keys last March, we ran into an all-too-common travel situation: an unexpected medical emergency. This was a relatively minor situation - an ear infection the day before we were scheduled to fly home - but it still needed to be dealt with.

After accidentally paying for the treatment with a regular card instead of our HSA card, we were able to get the expenses reimbursed quickly and easily. Once again, our HSA came to the rescue when we needed it most.

Your HSA can be a lifesaver on vacation - and can even help fund your travel expenses. Here are some examples of how you can use your HSA while travelling.

Medical tourism

If you're traveling abroad for a medical procedure, you can pay for the service with your HSA. However, those services have to fall under traditional HSA guidelines. In the US, for example, you can't pay for elective cosmetic surgery with your HSA. That means you can't do it abroad either.

If a doctor recommends a certain procedure, such as corrective surgery for a deviated septum, you can use your HSA to have the work done in a foreign country. In general, if you could use your HSA to pay for it in America, you can use your HSA to pay for it in another country.

Your HSA will also cover the travel costs associated with medical tourism, but only up to a certain point. Lodging for a patient caps at $50 a night, and meals aren't included. If the patient requires another adult to be with them during the operation, their lodging will also be covered. That usually only applies to parents traveling with their children or mentally unfit adults who needs supervision.

If you're getting medical care in another country, only transportation expenses related to that care will be reimbursed. For example, if you're in Mexico having a root canal and decide to see some ancient ruins while you're there, you can't pay for a tour guide with your HSA. You'll be assessed a 20% penalty plus income tax if you accidentally use your HSA for non-qualified expenses.

Getting medical expenses reimbursed doesn't just apply if you go abroad for medical care. It also applies if you're on vacation and hurt yourself accidentally. If you're in Rome and sprain your ankle while walking the Spanish Steps, you can use your HSA card to pay for a visit to an Italian doctor. You can't get any travel or lodging expenses reimbursed in this case, since you left the country for non-medical reasons, but it's better than nothing.

How to get reimbursed

Keep all related bills and receipts in a safe place until you're ready to file for reimbursement. When you file for reimbursement, include itemized bills from doctor's offices, hotel receipts, plane tickets and anything else related to your stay.

Make copies of your statements if you're mailing forms for reimbursement, since it can be difficult to get copies sent from a foreign country when the originals are lost.

If the reimbursement is completely or partially denied, ask your HSA provider why. It may be that you need to get your primary care doctor to prove that your condition was medically necessary and urgent.

Whether you're spending steadily or saving for something, Wage Up! is where we highlight the latest services available to buy with your HSA, every Monday on the HSA Learning Center. And for everything else about your health and financial wellness, be sure to follow us on Facebook and Twitter.