Here’s a quick quiz for you. What comes first to mind if I say “that time again?” You might believe it is time to queue up at the post office to mail cards and gifts. Or, maybe it is time to make reservations for New Year’s Eve dinner with your honey bunny. Both are ideas worth considering, but neither of those ideas is what Gildshire is all about today. In this case, “that time” is the time for planning your strategy at work where benefits are concerned. Personal time (usually abbreviated to “PTO”), flex-time, paternity, and maternity leave, and configuring your 401k. These are aspects of work benefits that people understand. But, a Health Savings Account is obscure enough to baffle many of us. Today, Gildshire untangles the myths behind that HSA checkbox and clears up your choices.
Myth #1: HSAs are for people with low to no medical expenses.
Some people hesitate on selecting high-deductible health insurance policies paired with an HSA if known medical expenses are coming up during the next benefit year. Instead, they choose a higher monthly cost/lower deductible coverage. This can be a costly mistake because your employer’s seed money, which is a flat contribution instead of a match, can make up the difference plus some once your monthly deductible is factored into the equation.
Myth #2: If you leave your job, the Health Savings Account that you had is gone.
Nothing could be further from the truth (except that frozen yogurt is a good substitute for ice cream. That is further from the truth). Most HSAs can stay in place even if you are no longer going to be at that job. Or, as with an IRA, your Health Savings Account can be rolled over into a new one.
Myth #3: Your family can only access your HSA if they are covered under your insurance.
The family has your insurance, separate coverage, or no coverage at all. You can still access Health Savings Account funds to defray the medical expenses incurred by any, or all, of you.
Myth #4: A savings account is your only HSA investment option.
Confusion over this one is understandable, because “savings account” is right there in the name of the benefit. Pay it no mind. Your Health Savings Account administrator will almost certainly allow investments in mutual funds if you so desire.
Myth #5: The clock starts ticking on your HSA money the minute you incur a medical expense.
Let’s pretend that you had your gallbladder removed at the Mayo Clinic, and paid your $3,500 deductible from your checking account. There is not a set time afterward that you must pull the money from your Health Savings Account. Your HSA administrator keeps track for you and the money in the HSA can remain as a fallback amount if you desire.
Myth #6: You must get written permission from the administrator to access HSA funds.
This one is pure nonsense! Most Health Savings accounts send a debit card to you at home so you can access the money as you please. You must stipulate that there is a qualifying medical situation connected to the withdrawal, but you never need permission from any kind of governing body.
Myth #7: You can only contribute to an HSA until your 65th birthday.
This one can be confusing because of something that is, in fact, true. You cannot contribute to your Health Savings Account after you start Medicare. While most folks begin accessing Medicare on their sixty-fifth birthday, some people remain under an employer’s health plan until the end of their working days, which can be as late as 70 years of age. Those people may still kick money into a Health Savings Account.
Those are the seven myths. Settle them in your mind so you can get that list of Christmas chores. Did Gildshire send you our wish-list?