Open enrollment is coming up for me, and this idea recently popped into my head.
We haven't being doing the high deductible HSA plan option because we spend a lot of money on my son's therapies every year. However, right now the kids are both covered under my husband's medical plan, because his company pays a little more for their medical coverage, so for the same plan it's cheaper. I'm still covered under my employer's plan. It just occurred to me that since I don't have any medical issues, perhaps I should switch to the HSA option. We have high income so the tax savings would be huge, and I'm keen to use it as another retirement account.
But I have some questions. I read that you can save your medical expense receipts and get disbursements from the account years later. However, since I'm the only one covered under the plan, does this also apply for expenses for other family members? Or can I only get disbursements for my own medical expenses?
Also, I recently got a letter from the IRS saying that I owe taxes on HSA disbursements from two years ago. I am 100% certain that we never used HSA money for anything other than medical expenses. I sent back a letter explaining this and included a copy of the disbursement records from the company that manages the HSA, and have yet to hear back from the IRS. Not sure how big of a pain this going to turn out to be, but it's made me a little wary of HSA accounts in general. Has anybody dealt with a similar situation before? What could possibly make the IRS think we didn't use the money for medical expenses?
