How does bookkeeping for an HSA work (keeping receipts for decades)

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
sidr
Posts: 13
Joined: Mon Dec 29, 2014 8:27 am

How does bookkeeping for an HSA work (keeping receipts for decades)

Post by sidr » Thu Nov 07, 2019 12:44 pm

I'm a federal employee choosing among the various health insurance options for 2020. As long as I've been in Federal service, I've been on BCBS Basic, and have been happy with it. I'm considering switching to a HDHP for next year (probably GEHA; CareFirst's formulary doesn't meet our needs). But I'd like to understand how people cope with all the bookkeeping for paying out of pocket for health care expenses and then submitting receipts years or decades later from the HSA. This seems super burdensome. (The only really old financial form that I currently need to preserve is probably a 15-year old 8606 for cost basis in an IRA. That's 2 pages.) While I realize that I could draw from the HSA immediately, that defeats some of the HSA's benefit. Help! Thanks!

mervinj7
Posts: 1126
Joined: Thu Mar 27, 2014 3:10 pm

Re: How does bookkeeping for an HSA work (keeping receipts for decades)

Post by mervinj7 » Thu Nov 07, 2019 12:45 pm

sidr wrote:
Thu Nov 07, 2019 12:44 pm
I'm a federal employee choosing among the various health insurance options for 2020. As long as I've been in Federal service, I've been on BCBS Basic, and have been happy with it. I'm considering switching to a HDHP for next year (probably GEHA; CareFirst's formulary doesn't meet our needs). But I'd like to understand how people cope with all the bookkeeping for paying out of pocket for health care expenses and then submitting receipts years or decades later from the HSA. This seems super burdensome. (The only really old financial form that I currently need to preserve is probably a 15-year old 8606 for cost basis in an IRA. That's 2 pages.) While I realize that I could draw from the HSA immediately, that defeats some of the HSA's benefit. Help! Thanks!
I take a picture of the receipt and add it to a Google Drive folder.

marcopolo
Posts: 2406
Joined: Sat Dec 03, 2016 10:22 am

Re: How does bookkeeping for an HSA work (keeping receipts for decades)

Post by marcopolo » Thu Nov 07, 2019 12:49 pm

sidr wrote:
Thu Nov 07, 2019 12:44 pm
I'm a federal employee choosing among the various health insurance options for 2020. As long as I've been in Federal service, I've been on BCBS Basic, and have been happy with it. I'm considering switching to a HDHP for next year (probably GEHA; CareFirst's formulary doesn't meet our needs). But I'd like to understand how people cope with all the bookkeeping for paying out of pocket for health care expenses and then submitting receipts years or decades later from the HSA. This seems super burdensome. (The only really old financial form that I currently need to preserve is probably a 15-year old 8606 for cost basis in an IRA. That's 2 pages.) While I realize that I could draw from the HSA immediately, that defeats some of the HSA's benefit. Help! Thanks!
A lot of people seem to do this (keep receipts)

My thinking is that i will likely have more than enough healthcare expenses later in life to use up the accumulated HSA assets without needing old receipts. If not, I will either be dead (don't care) or have had very little health expenses (which will make me so happy, i will not care about being a little less tax efficient!)

I have only had access to an HSA for about 10 years, so others are having to deal with a much bigger pile of money.
Once in a while you get shown the light, in the strangest of places if you look at it right.

User avatar
samsoes
Posts: 1357
Joined: Tue Mar 05, 2013 9:12 am
Location: Northeast Rat Race

Re: How does bookkeeping for an HSA work (keeping receipts for decades)

Post by samsoes » Thu Nov 07, 2019 12:51 pm

sidr wrote:
Thu Nov 07, 2019 12:44 pm
...paying out of pocket for health care expenses and then submitting receipts years or decades later from the HSA.
Unlike an FSA, you don't have to submit anything to get reimbursement from a HSA. You simply write yourself a check from the HSA to get reimbursed. Just make sure you have a record of the receipts in the unlikely event the IRS audits you.
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. | (Avatar is the statue of Gen. Warren atop Little Round Top @ Gettysburg National Military Park.)

runner3081
Posts: 2536
Joined: Mon Aug 22, 2016 3:22 pm

Re: How does bookkeeping for an HSA work (keeping receipts for decades)

Post by runner3081 » Thu Nov 07, 2019 12:54 pm

Spreadsheet - Local computer and Google Sheet
Receipts - One scanned copy local computer, one Google Drive and keep the paper copy

User avatar
Svensk Anga
Posts: 589
Joined: Sun Dec 23, 2012 5:16 pm

Re: How does bookkeeping for an HSA work (keeping receipts for decades)

Post by Svensk Anga » Thu Nov 07, 2019 1:55 pm

You might set a lower limit on the dollar amount of receipts you save. You’ll give up some of the potential for timing tax free withdrawals, but it will cut the amount of record keeping you have to keep up with.

I believe Medicare premiums are HSA qualified so there is that potential if you can wait till 65+. By then vision, dental and hearing bills will be growing. For myself, I like to have a good stock of receipts so that the HSA can be a ready source of tax free funds in early retirement.

kaneohe
Posts: 5930
Joined: Mon Sep 22, 2008 12:38 pm

Re: How does bookkeeping for an HSA work (keeping receipts for decades)

Post by kaneohe » Thu Nov 07, 2019 5:21 pm

In addition to the receipts, it may be helpful to have copies of the insurance co. EOBs to backup your claims of legitimate
unreimbursed medical expenses, all your prior yr tax records to demonstrate that you did not claim those expenses as medical
deductions in the past, all your prior HSA records again to demonstrate that you didn't reimburse yourself for those expenses in the
past. You may also want to consider if your surviving spouse would like this job if you go first.

Post Reply