If you selected an HSA plan in 2015, now may be a good time to review how the year is going and make some changes to make the most of your account in 2015.
First, have you taken advantage of the free preventive health benefits your plan provides? If you haven’t gone in for an annual check-up, pick up the phone now and get it scheduled. Nothing is more powerful than a regular visit to the doctor to screen for problems and chat about how you can improve your health. Your plan may offer other free benefits and resources such as drug discount cards, free nurse line calls, cost transparency and other tools to help you make the most of your health care experience. A five minute visit to your health plan or HSA account website may yield some overlooked benefits that you are already paying for.
Second, how much have you set aside in your HSA account? Unlike FSAs where your annual election is fixed for the entire year, HSA contributions can be adjusted anytime during the year. Are you contributing through your employer’s payroll? If not, consider building a reserve to start planning for future health care costs.
If you are already contributing regularly, where are you versus the 2015 limits of $3,350 for those in self-only plans or $6,650 in family plans? Consider bumping it up a bit if you are well below those limits.
If you are closer to the limit, make sure that the combination of your deposits and those of your employer are not going to exceed the limit for the year. Sometimes a wellness reward placed into an HSA can bump you over the limit you were planning to hit. If you find you are over the limit, make sure you work with your HSA Trustee and employer to correct the mistake before tax day of 2016, or you will be socked with a 6% penalty and need to remove the excess amount from your account to prevent on-going penalties on the earnings from that over-contribution.
Third, look for medical expenses you have paid out of pocket during the year. Many people will pay for items out of pocket during the course of the year that are HSA-eligible. When you do this you are creating a tax-free withdrawal from your HSA anytime in the future. Many HSA Trustees will help you keep track of this activity by allowing you to log your expenses in a claims vault or “electronic shoe box” by taking a photo of the receipt. This way you have a permanent record of the expense in case you ever get audited by the IRS.
Finally, consider a prior year contribution when you prepare your taxes next year. Remember, you have until April 15, 2016 to complete your HSA contribution for 2015. By arranging for a prior year contribution directly to your HSA Trustee. You may find that when you prepare your taxes that you need some extra deductions and a prior year HSA contribution is an excellent way to save on taxes and improve your health savings for the future.
Todd Berkley is an HSA industry veteran who runs AskMrHSA.com, and is the author of the HSA Owner’s Manual.