Ask the Experts

Ask the Experts

Health Savings Account Facts:

  • Yes. There are HSA custodians that provide services with a broad range of investment choices. This allows an advisor to build a personalized HSA portfolio, advise on the account, and be comoensated. For more information send me an email to discuss:
  • Generally speaking, YES! HSA custodians who support financial advisors will often have most of the mutual funds and even the appropriate share class you are using in your 401(k). If you are an advisor who manages defined contribution plans, you can set up, manage and be compensated on the client HSA allocations.
  • Health Savings Accounts are only available with certain “high deductible” health insurance plans. In addition to having a 2020 deductible set at $1,400 for individual coverage or $2,800 for family coverage, the plan also must carry limits on the maximum out-of-pocket expenditures for families or individuals. They also have rules regarding what services can be provided prior to meeting the deductible. The best way to be sure that your health insurance makes you eligible for an HSA is to ask your insurance provider or employee benefits coordinator.
  • Yes. Many HSA custodians offer a variety of investment choices ranging from mutual funds to full service brokerage accounts. Unused funds in an HSA grow tax-deferred. If you are not satisfied with the investment choices in your current HSA you can transfer your balance at any point to a new custodian. You may need to pay a transfer fee and employer sponsored plans will usually require on going payroll deducted contributions to continue into the custodian linked to your health insurance policy.
  • Qualified medical expenses can be paid for with a tax-free withdrawal from your HSA so it’s good to have receipts to verify the expenditure. If you pay for qualified health expenses with non-HSA money (in a year when you had HSA insurance) you can make a tax-free withdrawal from your HSA at any point in the future.
  • If you open a separate HSA account for each spouse, then yes, each spouse (age 55+) can utilize the $1,000 catch up provision.
  • Medicare A, B, C (Medicare Advantage Plans), and D are qualified medical expenditures. If you have your Medicare deducted from Social Security Benefit, you simply withdraw an amount equivalent to your premiums from your HSA. Medicare Supplement Premiums (Medigap) cannot be paid for with tax-free HSA distributions.

Medicare Facts

  • Medicare will look at the income reported on your tax return from two years’ prior (2020 Medicare premium is based on your 2018 modified adjusted gross income).
  • Yes, you can file form SSA-44 and ask for this re-consideration. A few of the legitimate reasons for a reduction in income that are listed on the form include: retirement, death of a spouse, divorce, or loss of a pension..
  • The answer depends on your income (more specifically your modified adjusted gross income). Medicare places you in one of six income brackets to determine the amount of your Part B and Part D premium. If you are in the first (lowest) bracket, an increase in Medicare B Premiums can eliminate part or all of a Social Security Retirement Benefit COLA but cannot decrease your Benefit. An increase in Medicare Part D premium could eliminate your COLA or decrease your Benefit (primarily in years with minimal or no COLA).

    If you are in brackets two through five, an increase in Medicare B and / or D can eliminate your COLA and decrease your Benefit.