Publ 969 pg.6 says: "If you are no longer an eligible
individual, you can still receive tax free distributions to
pay or reimburse your qualified medical expenses." You
could use it to pay deductibles and co-pays and expenses not
covered by your employer, but qualified as HSA expenses.
Otherwise, either leave it in place, or pay tax and penalty.

Don in Colorado

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According to the Q&A at the US Treasury site:
"I have an HSA but no longer have HDHP coverage. Can I still
use the money that is already in the HSA for medical
expenses tax-free?

Once funds are deposited into the HSA, the account can be
used to pay for qualified medical expenses tax-free, even if
you no longer have HDHP coverage. The funds in your account
roll over automatically each year and remain indefinitely
until used. There is no time limit on using the funds."

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

unlike previous incarnations, money in an HSA that is not
spent on your out-of-pocket medical bills rolls over--you
don't lose it. You can contribute to an HSA as long as you
have an eligible high-deductible health plan. No tax on
withdrawals for medical expenses or ANY withdrawals after
age 65.

Be aware of maintenance fees for your HSA--expect to spend
$40-70 per year until more institutions offer them.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

maks71[at]gmail.com wrote:

- quote -

That's the annual limit for a family plan for 2006. In
order to be eligible to contribute the full amount, you'd
need family coverage with that deductible from January 1,
2006 to December 31, 2006.

- quote -

Oops. You've probably got an excess contribution.
http://www.hsabank.com/accountholder...calculator.asp
has a nice table to figure what you're allowed to contribute.

- quote -

It just sits there until you either use it on medical
expenses (tax-free) or on something else (10% penalty, plus
tax) or for retirement (at age 65, tax but no penalty).

Phoebe

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

- quote -

The dollar figure is valid only if you're eligible and have
the same coverage for the entire year. (See "Limit on
contributions" in IRS publication 969.) Otherwise, the limit
is lower. There's a worksheet in the instructions for IRS
form 8889 for calculating the limit.

- quote -

See the instructions for IRS form 8889, where it says, "You
can receive distributions from an HSA even if you are not
currently eligible to have contributions made to the HSA."

For IRS forms and publications, see
http://www.irs.ustreas.gov/formspubs/index.html

(Disclaimer: I'm not a tax pro, just a fellow HSA user.)

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May I get some attention here??? Can someone reply here...

Moderator: You lose the money!

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

I'm currently self employed and considering individual
insurance with H.S.A (HealthCare Saving Account) account. I
have following question.

Lets say I go with there 5450$ deductible plan. i.e I'm
eligible to contribute $5450 pre-tax towards H.S.A. And
lets say I contributed 4000$ in HSA. and in the same year,
spent arount 1000$ for eligible medical expences like office
visits/prescriptions etc. Few months take up full time job
and enroll in the Company provided group plan that does not
offer HSA and discontinue the individual insurance I bought
with HSA.

What would happen to 3000$ that's unspent in my H.S.A? Would
I still be able to spend towards my medical expences? Or I
have no option but to withdraw that money with 10%penalty...

I have asked these question to BlueCross folks but they
recommended me to contact IRS or tax consultant. So I'm
asking that to you folks.

Thanks in advance for your helpful answers.

Mak

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >