Changes to the rules on health savings accounts as of 1 January 2007, are generating new interest in the plans. However, there is still a knowledge gap regarding the actual use of the plans. A recent article published in Health Savings Accounts appeared in the Wall Street Journal Online and questions about the possibility of using an HSA as a vehicle for saving for future expenses verses from the funds of the HSA immediately reimbursement of medical expenses.

HSA many users are not aware that the IRS allows investors to be both HSA Spenders and savers. As an affiliate of Entrust Group, we offer continuing education courses for employers, employees and professional advisers, teaching the rules for HSA and HDHPs. Surprisingly, few consultants and even fewer people really understand how the HSA.

Contrary to common belief, there is no obligation to take the time to HSA distributions. In other words, owners who choose the HSA to pay medical expenses out of their personal funds, rather than the immediate adoption of a reimbursement for costs from their HSA to postpone repayment until you really need the cash. Meanwhile, the funds continue to grow tax free. The longer the funds remain in the shelter of the HSA, the more we can grow. Glasses can now be paid from his pocket and then reimbursed from the HSA, the day after, Ilil next year, or 20 years from now. The choice lies with the owner HSA. Thus, if an individual can comfortably pay personal expenses, then there is really no reason to take the money from the HSA. The taxpayer does not give up the option of taking a refund by delaying it. Thus, fueled by additional funds, the HSA can try the longer term, higher yielding investments.
Similarly, many taxpayers do not realize that the costs incurred in excess of the HSA balance can be repaid in subsequent years. The requirement is that the one was to HSA were determined before the expenditure to be incurred. Unfortunately, the IRS Form 8889 does not show these “carry-over costs” are not many editors tax to help customers to monitor the expenditure not yet been repaid.

How to track UN versatile costs is critical to determining the amount of HSA balance is eligible for immediate tax free distribution, our company has created an A “money back Expense Tracking System” to help our clients to organize and catalog the Nations combined, the reimbursement costs.

Please contact us for details for the use of an HSA for long-term investments or join us for a WebEx seminar to introduce the basics of HSA / High Deductible Health Plan combination. Bill Humphrey, one of the principles of Entrust NewIRA Direction in Colorado, (www.NewDirectionIRA.com) was a crusader for Health Savings Accounts since their inception in 2004. Colorado Bill is a CPA and has worked on development of educational programs for CPA and the users health plan to clarify the understanding and use of the HSA. Entrust New Direction has programs available live and on the Internet for users of HSA and employers anticipating the adoption of High Deductible Health Plans for their businesses.