Health Savings Accounts: Qualified Plans, Taxpayers, and Expenses; Reporting Distributions; Retirement Funding

HSAs benefit taxpayers in many ways, including providing funds to pay for medical expenses. HSAs can also serve as an investment vehicle, additional retirement funds, and an emergency cash stash. They may be one of the most beneficial yet underutilized planning tools available to certain taxpayers.

To implement an HSA, a participant must have an eligible insurance policy with a high deductible of at least $1,400 for individual plans and $2,800 for family plans. Contributions to HSAs avoid both federal and most state income and payroll taxes (e.g., FICA, FUTA). Employers often offer these plans, and the fees and investment options vary with each financial institution.

Participants can withdraw money from their HSA for eligible medical expenses. The list of qualifying medical expenses is fairly liberal and includes over-the-counter drugs, acupuncture, and qualifying travel expenses. Taxpayers can use HSA funds to pay Medicare premiums after age 65.

Tax advisers working with employers and individuals participating in these plans need to understand the benefits and requirements for contributions and distributions and other unique opportunities these accounts provide so they can incorporate them into the financial advice they provide, especially when planning for retirement.

Listen as our panel of HSA experts explain who can and cannot use an HSA, how to maximize tax advantages, and how to incorporate an HSA into retirement planning.

1. What is an HSA?
2. Who can and who cannot use them
3. Qualified medical insurance plans
4. Contribution limits
5. Qualifying expenses
6. Tax advantages
7. Investment opportunities
8. How to supplement retirement plans

The panel will review these and other critical issues:

• Using an HSA to pay Medicare premiums
• Using an HSA as an alternative to Medicare supplement coverage and long-term care insurance
• Utilizing an HSA as an investment vehicle
• Generating tax-free income in retirement without RMDs

Learning Objectives

After completing this course, you will be able to:

• Identify taxpayers eligible to participate in an HSA
• Determine the tax benefits of HSAs
• Decide what plans are qualified high-deductible plans
• Ascertain how individuals can use HSA funds to pay Medicare premiums

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of individual income taxation, including itemized deductions, individual income tax credits, net operating loss limitations including carrybacks and carryforwards.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).