Anybody Using Or Planning To Use An Hsa In The Philippines

[davewe]

I just checked with my insurance company and confirmed the following:

 

Most dental is covered by the HSA. Maybe not some cosmetic dentistry.

 

Most vision is covered including cleaning supplies.

 

Insurance premiums seems to be a grey area and I cannot find anything definitive as to whether you can or cannot pay for insurance using the HSA after retirement.

 

Generally you can use the HSA for non-covered dependents, meaning that if you retire in PI and get married or have a child you can use the HSA for those medical needs also.

 

So far the only difference with Obamacare is that the penalties for non-medical expense withdrawals are higher (prior to age 65) and most over the counter meds are not covered, unless prescribed by a doctor.

Edited September 29, 2014 by davewe

[Gator]

Insurance premiums seems to be a grey area and I cannot find anything definitive as to whether you can or cannot pay for insurance using the HSA after retirement.

 

See IRS Publication 502, pages 8 & 9. http://www.irs.gov/pub/irs-pdf/p502.pdf

 

In a nut shell, health insurance premiums can be paid out from the HSA, but only plans, or parts of a plan, that are for medical care expenses. In other words, you can't use it to pay for things like disability insurance, life insurance, etc. which are sometimes bundled into a health plan.

Edited September 29, 2014 by Gator

[intrepid]

See IRS Publication 502, pages 8 & 9. http://www.irs.gov/p...rs-pdf/p502.pdf In a nut shell, health insurance premiums can be paid out from the HSA, but only plans, or parts of a plan, that are for medical care expenses. In other words, you can't use it to pay for things like disability insurance, life insurance, etc. which are sometimes bundled into a health plan.

 

Thanks again Gator,

WOW, just what I was hoping for!  After reading the link it is clear that medical insurance premiums can be paid with the HSA.  Still the only question left is can I use it to pay for my medical insurance bought outside the US, as in the Philippines like Phil Blue Cross?  The Publication makes no reference to out of the country services/purchases that I can see.

[Gator]

Still the only question left is can I use it to pay for my medical insurance bought outside the US, as in the Philippines like Phil Blue Cross? The Publication makes no reference to out of the country services/purchases that I can see.

 

You're welcome.

 

During an audit a few years ago I asked the supervisory agent a question about something that's not pertinent for this thread, but his answer was: "If it's not expressly prohibited, then it's allowed". Btw, I jokingly asked him to put that in writing, he pulled out an IRS letterhead and did; I framed it and hung on my office wall.

 

Seriously, in anticipation of my upcoming extended visit to the Phils, and among other things, I asked my tax advisor recently about that myself as my US Blue Cross plan is about to be canceled (thanx Comrade O!). I was told that it was fine, as long as the other rules are met; I should point out that if you're under 65 then it is still supposed to be a HDHP in order to legally keep your HSA open. A bit off topic, but I also asked if having a foreign plan, even one like the inexpensive Phil Health Care, would qualify as a mandatory health care plan for tax purposes (to avoid the 2% or set $ fine for not having health insurance). I was told it was allowable; same rule applies - if not expressly prohibited........

 

But to be safe, I'll think I'll head to my storage unit and dig out that letter :)

Edited September 29, 2014 by Gator

[intrepid]

Well,
Not all is lost.  I believe the HSA is still a good idea for my family and others.  But I was hoping to be able to deduct the premiums! :angry:


But according to page 1, the 3rd column, 2nd paragraph under NOTE

You cannot treat insurance premiums
as qualified medical expenses unless
the premiums are for:
1.
Long-term care (LTC) insurance,
2.
Health care continuation
coverage (such as coverage under
COBRA),
3.
Health care coverage while
receiving unemployment compensation
under federal or state law, or
4.
Medicare and other health care
coverage if you were 65 or older (other
than premiums for a Medicare
supplemental policy, such as Medigap).


http://www.irs.gov/pub/irs-pdf/i8889.pdf

[Gator]

..........But I was hoping to be able to deduct the premiums! But according to page 1, the 3rd column, 2nd paragraph under NOTE You cannot treat insurance premiums as qualified medical expenses unless the premiums are for: 1. Long-term care (LTC) insurance, .............. 

 

At first glance there does seem to be a conflict from what's in Pub. 502, but what you're quoting is from the instructions for filling out IRS Form 8889. IRS Publications are in essence an explanation / clarification of the tax code (law) and they take precedence.

 

Take note however that we are talking about regulations as they pertain for tax year 2013, so our discussion could be mute if we're talking about what you (and others) plan to do in the future. The new Pub. 502 should be available sometime in mid-December. 

 

In addition, What you enter on line 15 of that form (or any where else) only becomes an issue if you get audited. Take note that I'm not advocating anyone cheats the IRS when filing their taxes   :as-if:

Edited October 1, 2014 by Gator