What happens if I eventually have a non HSA plan after having one?

[lilybluerose]

I have a most likely silly question. This is my first year with an HSA eligible health insurance plan. I buy my own insurance. I opened an HSA through fidelity.

What happens if down the road I cant afford an HSA plan and choose something else for any reason? Im assuming I can still keep and use that HSA but just not contribute to it any longer? If that is the case can I still use it for medical expenses if I do not have an HSA plan, or do I just take money out of it at age 65 plus. Does this make sense?

Thanks!

[seattlecyclone]

Yes you can use the HSA money for medical expenses after you stop having HSA-compatible insurance, same as before. Be aware that if you switch mid-year your HSA contribution limit for that year will be prorated based on how many months you had HSA-compatible insurance.

[terran]

Note that you can use an HSA only for qualified medical expenses, which would not include expenses that are reimbursed or paid for by insurance, so if you switch to a plan that covers more than an HSA eligible plan covers you would have fewer expenses that would be eligible for reimbursement from the HSA.

[lilybluerose]

Note that you can use an HSA only for qualified medical expenses, which would not include expenses that are reimbursed or paid for by insurance, so if you switch to a plan that covers more than an HSA eligible plan covers you would have fewer expenses that would be eligible for reimbursement from the HSA.

Would you mind please explaining this a bit more? I dont really understand what this means. Every plan that I have ever had, insurance will cover a portion, and then I am billed for the rest. Is that what you mean? Like even with the plan I have now, that is what I figured I would be able to utilize. So if I get an mri, that cost $1000 and insurance covered $800, and I was billed for $200, I would put that in my HSA receipts folder, the $200 and be able to "pay myself" that $200 when I wanted to in the future, as I would just pay the $200 out of pocket when I was billed. Is that correct?

[lilybluerose]

I also  have a question about dependents. I was watching the fidelity HSA videos, and one talked about being able to use it for my dependents. I am a single parent with two kids. They are on my tax forms as dependents. They have their own separate insurance though outside of this plan. Would their bills/medical item purchases still qualify for my hsa?

[SweetTPi]

Note that you can use an HSA only for qualified medical expenses, which would not include expenses that are reimbursed or paid for by insurance, so if you switch to a plan that covers more than an HSA eligible plan covers you would have fewer expenses that would be eligible for reimbursement from the HSA.

Would you mind please explaining this a bit more? I dont really understand what this means. Every plan that I have ever had, insurance will cover a portion, and then I am billed for the rest. Is that what you mean? Like even with the plan I have now, that is what I figured I would be able to utilize. So if I get an mri, that cost $1000 and insurance covered $800, and I was billed for $200, I would put that in my HSA receipts folder, the $200 and be able to "pay myself" that $200 when I wanted to in the future, as I would just pay the $200 out of pocket when I was billed. Is that correct?

I believe you are correct in your understanding of how the HSA system works.  Only the out-of-pocket portion that you have to pay is covered by your HSA, whether you pay directly with HSA money or are reimbursed at a later time.  That's the same if you have a current HSA plan or not.  If next year you don't have HSA eligible insurance, the money in your HSA account is still yours, to cover eligible out-of-pocket expenses or to keep & invest, and you simply will no longer be allowed to add to the pot. 

I don't know anything about how dependents work, sorry.

[sonofsven]

Note that you can use an HSA only for qualified medical expenses, which would not include expenses that are reimbursed or paid for by insurance, so if you switch to a plan that covers more than an HSA eligible plan covers you would have fewer expenses that would be eligible for reimbursement from the HSA.

Would you mind please explaining this a bit more? I dont really understand what this means. Every plan that I have ever had, insurance will cover a portion, and then I am billed for the rest. Is that what you mean? Like even with the plan I have now, that is what I figured I would be able to utilize. So if I get an mri, that cost $1000 and insurance covered $800, and I was billed for $200, I would put that in my HSA receipts folder, the $200 and be able to "pay myself" that $200 when I wanted to in the future, as I would just pay the $200 out of pocket when I was billed. Is that correct?

Yes, that is correct. Also, the HSA can be used for a lot of expenses beyond doctor appointments.
My provider (Lively, before I switched to Fidelity) had an extensive list of qualified expenses.

[mcneally]

Also, HSA funds are eligible to be withdrawn penalty and tax free so long as your cumulative qualifying expenses to date since you started the account exceed your withdrawals. You don't have to take distributions during the year that you incur the expenses.

[EvenSteven]

I also  have a question about dependents. I was watching the fidelity HSA videos, and one talked about being able to use it for my dependents. I am a single parent with two kids. They are on my tax forms as dependents. They have their own separate insurance though outside of this plan. Would their bills/medical item purchases still qualify for my hsa?

I don’t see that anyone responded to this yet. Yes, you can use the funds in your HSA to pay for eligible medical expenses for your dependents, regardless of what insurance they have.

[terran]

Note that you can use an HSA only for qualified medical expenses, which would not include expenses that are reimbursed or paid for by insurance, so if you switch to a plan that covers more than an HSA eligible plan covers you would have fewer expenses that would be eligible for reimbursement from the HSA.

Would you mind please explaining this a bit more? I dont really understand what this means. Every plan that I have ever had, insurance will cover a portion, and then I am billed for the rest. Is that what you mean? Like even with the plan I have now, that is what I figured I would be able to utilize. So if I get an mri, that cost $1000 and insurance covered $800, and I was billed for $200, I would put that in my HSA receipts folder, the $200 and be able to "pay myself" that $200 when I wanted to in the future, as I would just pay the $200 out of pocket when I was billed. Is that correct?

Yes, you'll be able to reimburse yourself for the $200. On the HSA plan, if you're under the deductible you'd be able to reimburse yourself for teh whole $1000 if insurance doesn't pay it.

[secondcor521]

I also  have a question about dependents. I was watching the fidelity HSA videos, and one talked about being able to use it for my dependents. I am a single parent with two kids. They are on my tax forms as dependents. They have their own separate insurance though outside of this plan. Would their bills/medical item purchases still qualify for my hsa?

I don’t see that anyone responded to this yet. Yes, you can use the funds in your HSA to pay for eligible medical expenses for your dependents, regardless of what insurance they have.

My understanding is that they had to be your tax dependent in the year in which the medical expense was incurred.  This can matter when kids have divorced parents and the kids are claimed by different parents in different years.

But I agree with you that the kids' insurance doesn't matter.

[EvenSteven]

I also  have a question about dependents. I was watching the fidelity HSA videos, and one talked about being able to use it for my dependents. I am a single parent with two kids. They are on my tax forms as dependents. They have their own separate insurance though outside of this plan. Would their bills/medical item purchases still qualify for my hsa?

I don’t see that anyone responded to this yet. Yes, you can use the funds in your HSA to pay for eligible medical expenses for your dependents, regardless of what insurance they have.

My understanding is that they had to be your tax dependent in the year in which the medical expense was incurred.  This can matter when kids have divorced parents and the kids are claimed by different parents in different years.

But I agree with you that the kids' insurance doesn't matter.

*Thumbs up emoji*

[lilybluerose]

I also  have a question about dependents. I was watching the fidelity HSA videos, and one talked about being able to use it for my dependents. I am a single parent with two kids. They are on my tax forms as dependents. They have their own separate insurance though outside of this plan. Would their bills/medical item purchases still qualify for my hsa?

I don’t see that anyone responded to this yet. Yes, you can use the funds in your HSA to pay for eligible medical expenses for your dependents, regardless of what insurance they have.

My understanding is that they had to be your tax dependent in the year in which the medical expense was incurred.  This can matter when kids have divorced parents and the kids are claimed by different parents in different years.

But I agree with you that the kids' insurance doesn't matter.

Thanks so much!! And just to clarify to make sure I am 100% understanding. Any medical bills or expenses from my children, I can save the receipts and reimburse myself exactle the same as I would myself ( similar to the above example, if they have an mri, I paid $200 out of pocket for it, I could save their receipt and reimburse it whenever years later? )

They are both my dependents soley. Thanks so much!

[secondcor521]

I also  have a question about dependents. I was watching the fidelity HSA videos, and one talked about being able to use it for my dependents. I am a single parent with two kids. They are on my tax forms as dependents. They have their own separate insurance though outside of this plan. Would their bills/medical item purchases still qualify for my hsa?

I don’t see that anyone responded to this yet. Yes, you can use the funds in your HSA to pay for eligible medical expenses for your dependents, regardless of what insurance they have.

My understanding is that they had to be your tax dependent in the year in which the medical expense was incurred.  This can matter when kids have divorced parents and the kids are claimed by different parents in different years.

But I agree with you that the kids' insurance doesn't matter.

Thanks so much!! And just to clarify to make sure I am 100% understanding. Any medical bills or expenses from my children, I can save the receipts and reimburse myself exactle the same as I would myself ( similar to the above example, if they have an mri, I paid $200 out of pocket for it, I could save their receipt and reimburse it whenever years later? )

They are both my dependents soley. Thanks so much!

Yes, exactly.  They do have to be qualified medical expenses, of course, but an MRI would obviously qualify.  Here's a link where you can read the rule yourself to confirm:

https://www.irs.gov/publications/p969#en_US_2022_publink1000204083

Also, since you mentioned kids, for the purposes of an HSA, qualified medical expenses include OTC stuff like ibuprofen, bandages, allergy medicines, etc.  Those things are small but they can add up over time.

Dental and eyeglass out-of-pocket also qualify.

For complete details, see IRS Pub 969 (the above link is to a part in the middle of Pub 969).

[lilybluerose]

This is amazingly useful information.Thank you SO much!