So, we’ve done it. We passed the four requirements to qualify for a health savings account test and are now what the Internal Revenue Service calls an “eligible individual”. We qualify for a health savings account and can officially make contributions. The IRS throws this term “eligible individual” around more than 50 times in publication 969, so you will see me start using it more around here. This is where things all start coming together....
Listen, I enjoy alcohol. An ice-cold beer in the summer or a stiff drink of liquor during the holidays can make for a good time. If there is a line in the sand between a good buzz and a good drunk, I probably cross it more than I should. But I typically try to stay away from the bad drunk territory when I can. I can deal with the occasional hangover here and there, but...
In part one of this series, we covered the health savings account (HSA) from a high level. We learned it is a special tax-exempt account that we can use to pay medical expenses. This packs a pretty nice punch. But there are other things to consider and rules to follow before you can join Max’s HSA cult. In part two, we went over the risk the IRS expects us to take on in exchange for...
My good friends over at the Medicare program adjust patient out-of-pocket costs every year. This information is usually released each November for the upcoming calendar year. In fact, just last week, they went ahead and updated the numbers for the calendar year 2021. One of the more important numbers I like to keep an eye on is the inpatient Medicare Part A deductible. So let’s get to it. The inpatient Medicare Part A deductible is increasing...
Uncle Sam isn’t just going to hand you over a tax-exempt health savings account (HSA) without something in return. They want us to have some skin in the game. Risk, as I like to call it. Taking on risk is actually one of the eligibility requirements, and the IRS uses a high deductible health plan (HDHP) to create that risk. That makes the high deductible health plan the bedrock of the health savings account. It’s...