Popular HSA Plans Face An ObamaCare Death Sentence

Clinton tried to wreck spending accts using some trade treaty. Didn't work.

Democrats have long hated HSAs, mainly because they entrust consumers to make decisions about their own health care and finances,

I think it is more a case of the money deposited in HSAs is not taxed. There's no Dem alive who can stand that.

We have enjoyed an HSA plan at work since 2009, and have several thousands in it.

I am looking at switching to my wife's company benefits (due to a job loss) and hers no longer carries an HSA.

Is this perhaps a trend, and what to do with the money we still have in the HSA?

what to do with the money we still have in the HSA?

You continue to use it for medical expenses until it is gone.

Had this discussion with my CPA two days ago because I turn 65 next year. I am going to max it out this year so I have money to use after I am on medicare.

Hussein hates liberty.

I think it is more a case of the money deposited in HSAs is not taxed. There's no Dem alive who can stand that.

Bingo! I wish I had the chance to take the high-deductible plan and pump money into my HSA 30 years ago. Consider:

401k contribution - taxed on withdrawal

ROTH is a post-tax contribution

HSA contributions - NEVER taxed (assuming used for qualifying HC costs)

Youngsters who tend to use far less HC should be ALL IN on the high deductible plan, especially if the employer puts money into the account annually.

I am looking at switching to my wife's company benefits (due to a job loss) and hers no longer carries an HSA. Is this perhaps a trend, and what to do with the money we still have in the HSA?

First of all, I am so very sorry to hear about your job loss.

As ChildOfThe60s said, you can continue to use the money in your existing HSA to pay or reimburse yourself for qualified medical expenses that you incurred since first being enrolled in and HDHP and having opened an HSA and afterwards, even though you will no longer be in a qualified High Deductible Health Plan (HDHP). Or you can just let the funds sit. If you have enough money in the HSA, there may be some investment options available. Probably limited and nothing all that great, but if you let the funds sit, make sure you take advantage of that option as you can earn tax free interest on the funds.

Whenever you use your HSA funds, just make sure you keep all the receipts and EOB's (Explanation of Benefits) in case you are ever audited by the IRS.

You absolutely do not what to close the HSA and withdraw the funds except for using them qualified medical expenses as those withdraws will be subject to ordinary income tax PLUS a penalty of 20%, unless you are age 65 or over in which case it will be taxed as ordinary income but not subject to the penalty. You may keep the HSA with your former employer or roll the HSA funds over to a private HSA available through most banks, just make sure you are aware of any transfer or any maintenance fees.

You can no longer contribute to your HSA however, if you are no longer enrolled in a qualified HDHP. But if you are later employed by an employer offering a HDHP with an HSA, you can roll over your existing HSA over to that plan similar to what you can do with a 401k.

Also, assuming your job loss was very recent, please make sure you know (have your wife ask her employer’s benefit or HR person) how long you have in order to be added to your wife’s plan under a “qualifying event” – i.e. your loss of coverage. You may only have 30 days after losing your coverage to be enrolled in your spouse’s employer’s health plan under a “qualifying event” and would otherwise have to wait until their next open enrollment. You will also likely have to provide to your spouse’s employer with some sort of documentation as to your loss of coverage in order to be enrolled outside of open enrollment. So don’t think about it too long!

If you miss the deadline and have to wait for her employer’s next open enrollment period and unless you enroll in COBRA under your former employer’s plan or obtain private coverage elsewhere or coverage through an ACA Exchange, that could mean a gap in coverage and subject you to penalties under ACA. You can use your HSA funds to pay for COBRA premiums but not for private insurance premiums so that may not be your best choice.

Also when you say your wife’s employer “no longer carries an HSA” - don’t confuse a qualified HDHP with an HSA. They are closely related but not the same thing. One can have a HDHP without an HSA, but you can’t open or have an HSA unless at some point having been enrolled in a HDHP.

While I would find it hard to believe that your wife’s employer would offer a qualified HDHP without an HSA option, I have however seen stranger things. Some employers while offering a qualified HDHP, opt not to offer an employer sponsored or administered HSA and leave it up to the employee to open their own private HSA’s such as through a bank of their own choosing. Also some employers opt not to make any employer contributions to an HSA but that doesn’t mean they are not offering a HDHP or that opening or continuing to make contributions to your HSA (continuing to make tax free contributions to yours) is not still an option. Make sure you carefully read and understand all of your options and ask lots of questions before making any decisions.