Author Topic: Can we pay a medical bill from before we opened the HSA  (Read 3550 times)

Gin1984

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Can we pay a medical bill from before we opened the HSA
« on: March 28, 2015, 05:10:09 PM »
My husband's old employer's insurance  had a disagreement with a doctor's office and now the office is saying we need to pay an additional $104.  We have just switched to a high deductible plan and I was wondering if I could use the $104 from there.

wtrfre

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Re: Can we pay a medical bill from before we opened the HSA
« Reply #1 on: March 28, 2015, 05:30:49 PM »
Short answer is no, it would not be a qualifying disbursement.

MDM

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Re: Can we pay a medical bill from before we opened the HSA
« Reply #2 on: March 28, 2015, 05:35:55 PM »
Slightly longer answer, but probably no different from what wtrfre says, from http://www.irs.gov/publications/p969/ar02.html:

"For HSA purposes, expenses incurred before you establish your HSA are not qualified medical expenses. State law determines when an HSA is established. An HSA that is funded by amounts rolled over from an Archer MSA or another HSA is established on the date the prior account was established."

wtjbatman

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Re: Can we pay a medical bill from before we opened the HSA
« Reply #3 on: March 28, 2015, 05:42:20 PM »
No you can't.*

*My source is a long Bogleheads thread about this topic. By the end it was pretty well established that medical expenses incurred before having an HSA are non-qualified expenses. I'm not going to link the particular thread, but you could probably search the Bogleheads forum and find it.

Bob W

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Re: Can we pay a medical bill from before we opened the HSA
« Reply #4 on: March 28, 2015, 08:22:49 PM »
Of course you can.   No one audits this shit.  Even in the event uncle Sam audits and disallows it is a whoops.

Josiecat

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Re: Can we pay a medical bill from before we opened the HSA
« Reply #5 on: March 28, 2015, 11:10:27 PM »
I would try it. 

MDM

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Re: Can we pay a medical bill from before we opened the HSA
« Reply #6 on: March 28, 2015, 11:19:20 PM »
Of course you can.   No one audits this shit.  Even in the event uncle Sam audits and disallows it is a whoops.
I would try it. 

Have you two been watching SNL reruns?  E.g., from http://snltranscripts.jt.org/77/77imono.phtml
Quote
You.. can be a millionaire.. and never pay taxes! You can be a millionaire.. and never pay taxes! You say.. "Steve.. how can I be a millionaire.. and never pay taxes?" First.. get a million dollars. Now.. you say, "Steve.. what do I say to the tax man when he comes to my door and says, 'You.. have never paid taxes'?" Two simple words. Two simple words in the English language: "I forgot!" How many times do we let ourselves get into terrible situations because we don't say "I forgot"? Let's say you're on trial for armed robbery. You say to the judge, "I forgot armed robbery was illegal." Let's suppose he says back to you, "You have committed a foul crime. you have stolen hundreds and thousands of dollars from people at random, and you say, 'I forgot'?" Two simple words: Excuuuuuse me!!"

But, seriously, ...?

milesdividendmd

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Re: Can we pay a medical bill from before we opened the HSA
« Reply #7 on: March 29, 2015, 01:52:31 AM »
The best use of an HSA, if you can afford it, is to use it as a "stealth IRA".

This requires you to invest your hsa balance, pay for medical bills out of pocket, and save your medical receipts for later disbursements, after compounding.

MikeBear

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Re: Can we pay a medical bill from before we opened the HSA
« Reply #8 on: March 29, 2015, 03:53:01 AM »
The best use of an HSA, if you can afford it, is to use it as a "stealth IRA".

This requires you to invest your hsa balance, pay for medical bills out of pocket, and save your medical receipts for later disbursements, after compounding.

I plan on doing just this. I'm 56 right now, and have no intention of touching the money in my HSA before age 65. I'm doing a family pre-tax max-out ($7,650 this year). I will save up all my medical receipts from now until then, and start withdrawing money tax free corresponding to those at that age. The coolest thing with an HSA, (unlike a 401k) is you also NEVER pay Social Security taxes either before (while putting  money into), or after withdrawing money using this method.

That'll be a nice chunk of change to go along with my 401k, and my Vanguard Roth IRA accounts.
« Last Edit: March 29, 2015, 03:55:34 AM by MikeBear »

MDM

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Re: Can we pay a medical bill from before we opened the HSA
« Reply #9 on: March 29, 2015, 12:26:26 PM »
I'm doing a family pre-tax max-out ($7,650 this year).
If you have a spouse, you are leaving $1,000 on the HSA table - your actual max is $8,650.  See http://forum.mrmoneymustache.com/post-fire/hsa-contribution-limit-for-the-mfj-55-crowd/.

MikeBear

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Re: Can we pay a medical bill from before we opened the HSA
« Reply #10 on: March 29, 2015, 02:41:09 PM »
I'm doing a family pre-tax max-out ($7,650 this year).
If you have a spouse, you are leaving $1,000 on the HSA table - your actual max is $8,650.  See http://forum.mrmoneymustache.com/post-fire/hsa-contribution-limit-for-the-mfj-55-crowd/.

I can't create a separate HSA account for my wife, so I can't do that.