Mostly employers have HSAs rather than FSAs. HSAs are health 401ks. They completely belong to you. Money goes in pre-tax. It’s not use it or lose it. You can open one up on your own in two minutes (I use Lively which is excellent) and can contribute to one even after you’re retired. Of course there’s a maximum allowed contribution each year.
It can be used for insurance premiums, prescriptions, OTC meds, vitamins, birth control and pretty much anything else that you loosely determine is health related. There’s zero oversight on how you spend the money and the debit card that I have on my HSA will work just like a regular debit card.
Except HSA’s can only be had if you also have a qualifying High Deductible Health Plan. If you have more inclusive health insurance you cannot open or fund an HSA. If you have good insursnce now, but also already have an HSA from e.g. a prior job you can keep it and withdraw from it. But not add to it.
I wasn’t aware of that. I wouldn’t call high deductible plans bad insurance. When I was employed I had one and it was excellent insurance. I now have California Obamacare (Covered California) which is also high deductible and it’s very good.
I wasn’t aware that this was true, so if I were to retire before 65 I’d be able to pay my Cobra premiums? What about using the HSA to pay for overseas expat insurance?
You can’t treat insurance premiums as qualified medical expenses unless the premiums are for any of the following.
Long-term care insurance.
Health care continuation coverage (such as coverage under COBRA).
Health care coverage while receiving unemployment compensation under federal or state law.
Medicare and other health care coverage if you were 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap).
The premiums for long-term care insurance (item (1)) that you can treat as qualified medical expenses are subject to limits based on age and are adjusted annually. See Limit on long-term care premiums you can deduct in the Instructions for Schedule A (Form 1040).
Items (2) and (3) can be for your spouse or a dependent meeting the requirement for that type of coverage. For item (4), if you, the account beneficiary, aren’t 65 or older, Medicare premiums for coverage of your spouse or a dependent (who is 65 or older) aren’t generally qualified medical expenses.
This is my sticking point, what other “such as” situations are there? Would premiums other than Cobra before 65 be eligible? Say Affordable Care Act policies? Or ex-Pat insurance in another country before 65?
I recall that ACA premiums are but I don’t pay premiums so I didn’t follow up. As I mentioned, there’s no real auditing and I’d personally consider “such as” to fit the criteria.
I’ve had submitted expenses rejected. Back when covid started, for some reason Amazon didn’t label all masks as HSA-eligible, and when I submitted a bunch of orders they rejected those unlabeled ones (which I resubmitted, and they rejected them again for some reason).
I haven’t had any direct debits rejected, but then they’ve generally been obvious.
I will however look into that premiums questions, because it would apply to me.
If you retire before age 65 and you aren’t yet eligible for Medicare, you can use money in your HSA to pay your medical coverage premiums.
And according to my HSA card provider:
Premiums you pay before you are age 65 for insurance for medical care for yourself, your spouse, or your dependents after you reach age 65 are medical care expenses in the year paid if they are: is a qualified medical expense and eligible for reimbursement with a Flexible Spending Account (FSA), Health Savings Account (HSA), or Health Reimbursement Account (HRA)
I was wrong! And I have some things to figure out…
The card I have from Lively is just a regular debit card for some reason. It’s not HSA locked. I could literally buy a microwave oven and they wouldn’t give a shit. I don’t push it nearly to that extent but I have no problem using it for the nutritional supplement that my doctor suggested.
As a single filer over 55, the 2023 max contribution was $4850. It’s hardly enough for the IRA to worry about but it is certainly theoretically possible. With my current provider, I had some out of pocket expenses that totalled to several hundred dollars. I gave them an amount and I provided no proof or explanation. I just got a check a few days later. I again recommend Lively if you have a choice.
I get a pension. I’m envious of those of you who have been able to convert unused sick leave days into coverage for Medigap premiums. Years ago, my school district gave us cash for unused sick leave days upon retirement. Then in September of one school year, they ended the policy, and with no grandfathering. A teacher who was retiring at the end of that year was furious. He used every one of his sick days before retiring, so he was only teaching 2-3 days per week.
Interestingly but not surprisingly, the men were able to retire with a lot more unused sick leave than the women because, as it turned out, the women were more likely to stay at home with a sick kid. Hopefully, that’s changed since I retired.
Way back in July 2023, I posted here about filing an IRMAA appeal, so that I wouldn’t be dinged more than necessary for Part B and Part D payments (hopefully I’m remembering that right - it has been well over a year since I had to think about this stuff). But when I filed it, I made a big fat goof and listed only my own income on the form, rather than our married filing jointly income. I realized it the very next day and went straight back to try to get it corrected, but after several visits, SS finally informed me that they were unable to back out my mistake and to just wait for the system to discover my mistake.
Well, they finally did, and now I have to go back to the SS office with a copy of 2023’s tax return and other paperwork to finally straighten it out (I hope). It’ll result in my having to cough up some money to cover the erroneously low payments I’ve been making, so I’ll bring the checkbook too.
What a dope I was! In my defense, I remember that the wording on the original form I filed was slightly ambiguous when it came to filling out the income estimate.
I have had similar reactions to almost every SSA & Medicare form.
After a lifetime of joint tax returns w spouse and joint medical insurance on one employer or the other I find IRS and company paperwork is always very explicit about the single vs. joint case.
SSA and Medicare suck at explaining that. Most times it’s individual. Except when it’s not. Which they don’t bother to call out in plain obvious language.
Just want to add this article from my inbox. And people wonder why nobody wants to go into primary care.
MS Announces Cuts to Medicare Reimbursement in Effort to ‘Strengthen Primary Care’
The Centers for Medicare and Medicaid Services (CMS) is moving forward with a 2.9% cut to physician payments in 2025
Bringing this thread, and the IRMAA subject, back up again.
IIRC, SS only “looks back” twice after you retire, I think? I’m trying to track down that factoid, but so far I can’t find it. We’ve filed IRMAA applications twice now, for 2023 (looking back to 2021) and 2024 (looking back to 2022), and Mr. brown thinks we might have to do it again, but I believe that we’re done with IRMAA.
Whether you have to pay an IRMAA is calculated every year and 2) SSA calculates it from your tax return information and no application is needed.
Are you sure the application is for IRMAA ?- once I hit 65,I will have to fill out an application to get reimbursement for my premiums (including IRMAA ) from my employer’s insurance.
AIUI …
Every year until death they will assess IRMAA based on your tax return from 2 years ago unless you file form SSA-44 to explain why a different number is applicable to your case.
Bottom line being:
While your year to year income is pretty stable, the SSA’s default behavior is close enough. Whenever you have a significant disruption in income or change in family situation you can file form SSA-44 to make the change in IRMAA assessment take place a year sooner than the default delayed 2-year look-back provisions would have.
Huh, I could have sworn I remembered reading that they only look back twice and then they’re done. Thanks for the info.
So lessee, we retired mid-year 2023, so we only have half a year’s income from that, plus our social security benefits for 2023. I’ll have to sit down and work out our income for 2023, but with luck, it won’t be enough to kick us up into a higher bracket. And then after this, our incomes will be stable at a low enough total to keep us at the lowest bracket.
For anyone reading about my IRMAA goof, the final outcome of the whole mess is that they’ll ding me for the accumulated amount of under-payment by taking it out of my SS check this month. My January 2025 payment will be less than half of what I usually get. Poop.