Fidelity HSA

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Topic Author
Mikano
Posts: 21
Joined: Fri Oct 16, 2020 11:28 am

Fidelity HSA

Post by Mikano »

Hi All,

I been looking into opening an HSA account with Fidelity. I'm working and I do have medical coverage through my job. I pay a portion of the medical insurance that is being withdrawn from my paycheck weekly which my job covers.
My question is, can I still open an HSA and contribute for the next 15-or 25 years on my own till I retire?

Thank you ,
Michael
annu
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Joined: Mon Nov 04, 2019 7:55 pm

Re: Fidelity HSA

Post by annu »

If you have HDHP, yes you can, I did that last year as missed open window to do it through employer last year. So did after tax contribution. But benefit of doing pretax aka through your paycheck and through employer is that you can save on payroll taxes, as in after tax you still pay for it.

Also doing it after tax, you need to claim it as deduction in your taxes and it makes it more complex tax time, pretax is a lot simpler. So even though you will get the tax savings(minus payroll taxes you already paid), even with after tax you will have the tax savings, if I remember correctly ~$2000 savings ya ear on taxes for contributing 7100 max for the year.
Topic Author
Mikano
Posts: 21
Joined: Fri Oct 16, 2020 11:28 am

Re: Fidelity HSA

Post by Mikano »

annu wrote: Mon Jan 11, 2021 1:55 pm If you have HDHP, yes you can, I did that last year as missed open window to do it through employer last year. So did after tax contribution. But benefit of doing pretax aka through your paycheck and through employer is that you can save on payroll taxes, as in after tax you still pay for it.

Also doing it after tax, you need to claim it as deduction in your taxes and it makes it more complex tax time, pretax is a lot simpler. So even though you will get the tax savings(minus payroll taxes you already paid), even with after tax you will have the tax savings, if I remember correctly ~$2000 savings ya ear on taxes for contributing 7100 max for the year.
I find it complicated a little. All I know is that I pay a co-pay and my job covers the rest. I haven't paid any medical bills in years if not at all.
Knock on wood ! I'll have to look further into this and ask my employer.
nalor511
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Re: Fidelity HSA

Post by nalor511 »

If your plan does not have HSA or HDHP in the name then it's extremely unlikely that you qualify to contribute to HSA
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grabiner
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Re: Fidelity HSA

Post by grabiner »

Mikano wrote: Mon Jan 11, 2021 2:10 pm I find it complicated a little. All I know is that I pay a co-pay and my job covers the rest. I haven't paid any medical bills in years if not at all.
If you have a plan with a "co-pay" on all your medical expenses, it is probably not a qualifying HDHP. An HDHP is not allowed to pay for anything except preventive care until you have met its deductible, and there is a minimum deductible.

If your employer also offers an HDHP, you can switch at the next open season. Work out the math to see whether this is better, comparing expenses and also the tax benefits from the HDHP. (If you are in good health, it usually is better; you can use an HSA to save for medical costs in retirement.)
Wiki David Grabiner
Topic Author
Mikano
Posts: 21
Joined: Fri Oct 16, 2020 11:28 am

Re: Fidelity HSA

Post by Mikano »

grabiner wrote: Mon Jan 11, 2021 9:28 pm
Mikano wrote: Mon Jan 11, 2021 2:10 pm I find it complicated a little. All I know is that I pay a co-pay and my job covers the rest. I haven't paid any medical bills in years if not at all.
If you have a plan with a "co-pay" on all your medical expenses, it is probably not a qualifying HDHP. An HDHP is not allowed to pay for anything except preventive care until you have met its deductible, and there is a minimum deductible.

If your employer also offers an HDHP, you can switch at the next open season. Work out the math to see whether this is better, comparing expenses and also the tax benefits from the HDHP. (If you are in good health, it usually is better; you can use an HSA to save for medical costs in retirement.)

I was planning on just saving for medical cost for when I retire, I don't want to get tax by withdrawing it unless to cover what my plan now doesn't cover.
Thank you
H-Town
Posts: 3319
Joined: Sun Feb 26, 2017 2:08 pm

Re: Fidelity HSA

Post by H-Town »

Mikano wrote: Wed Jan 13, 2021 10:36 am
grabiner wrote: Mon Jan 11, 2021 9:28 pm
Mikano wrote: Mon Jan 11, 2021 2:10 pm I find it complicated a little. All I know is that I pay a co-pay and my job covers the rest. I haven't paid any medical bills in years if not at all.
If you have a plan with a "co-pay" on all your medical expenses, it is probably not a qualifying HDHP. An HDHP is not allowed to pay for anything except preventive care until you have met its deductible, and there is a minimum deductible.

If your employer also offers an HDHP, you can switch at the next open season. Work out the math to see whether this is better, comparing expenses and also the tax benefits from the HDHP. (If you are in good health, it usually is better; you can use an HSA to save for medical costs in retirement.)

I was planning on just saving for medical cost for when I retire, I don't want to get tax by withdrawing it unless to cover what my plan now doesn't cover.
Thank you
You need to research and understand HSA and HDHP plan. See wiki below.

https://www.bogleheads.org/wiki/Health_savings_account
https://www.irs.gov/publications/p969

When you said "co-pay", it seems to me that you're not eligible to put money in HSA. Fidelity won't stop you, but it will send the IRS Form 5498-SA. You will face a lot of trouble if you put money in HSA while not eligible. It starts with 6% of excise tax, applies to each year the excess contribution remains in the account.
Topic Author
Mikano
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Re: Fidelity HSA

Post by Mikano »

H-Town wrote: Wed Jan 13, 2021 2:30 pm
Mikano wrote: Wed Jan 13, 2021 10:36 am
grabiner wrote: Mon Jan 11, 2021 9:28 pm
Mikano wrote: Mon Jan 11, 2021 2:10 pm I find it complicated a little. All I know is that I pay a co-pay and my job covers the rest. I haven't paid any medical bills in years if not at all.
If you have a plan with a "co-pay" on all your medical expenses, it is probably not a qualifying HDHP. An HDHP is not allowed to pay for anything except preventive care until you have met its deductible, and there is a minimum deductible.

If your employer also offers an HDHP, you can switch at the next open season. Work out the math to see whether this is better, comparing expenses and also the tax benefits from the HDHP. (If you are in good health, it usually is better; you can use an HSA to save for medical costs in retirement.)

I was planning on just saving for medical cost for when I retire, I don't want to get tax by withdrawing it unless to cover what my plan now doesn't cover.
Thank you
You need to research and understand HSA and HDHP plan. See wiki below.

https://www.bogleheads.org/wiki/Health_savings_account
https://www.irs.gov/publications/p969

When you said "co-pay", it seems to me that you're not eligible to put money in HSA. Fidelity won't stop you, but it will send the IRS Form 5498-SA. You will face a lot of trouble if you put money in HSA while not eligible. It starts with 6% of excise tax, applies to each year the excess contribution remains in the account.
Thank you
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KingRiggs
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Re: Fidelity HSA

Post by KingRiggs »

Did you ever figure out whether your insurance plan is actually an HSA?
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Topic Author
Mikano
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Re: Fidelity HSA

Post by Mikano »

KingRiggs wrote: Mon Jan 18, 2021 8:08 am Did you ever figure out whether your insurance plan is actually an HSA?
I haven't even looked yet.
Spirit Rider
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Re: Fidelity HSA

Post by Spirit Rider »

Co-pay != HDHP != HSA eligiblity.

No ifs ands or buts.
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Helo80
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Re: Fidelity HSA

Post by Helo80 »

Mikano wrote: Mon Jan 18, 2021 9:32 am
KingRiggs wrote: Mon Jan 18, 2021 8:08 am Did you ever figure out whether your insurance plan is actually an HSA?
I haven't even looked yet.
It would be on your plan brochures mailed to you or online with your medical insurance provider.

You need an HDHP plan. If you have copays, you are probably ineligible and would be committing fraud. The irs will not accept ignorance of the law as an excuse.
Thank God for Wall Street Bets.
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KingRiggs
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Re: Fidelity HSA

Post by KingRiggs »

Mikano wrote: Mon Jan 18, 2021 9:32 am
KingRiggs wrote: Mon Jan 18, 2021 8:08 am Did you ever figure out whether your insurance plan is actually an HSA?
I haven't even looked yet.
Ummm...I think I'd make that a priority...like calling HR NOW.

This could be a BIG issue...
Advice = noun | Advise = verb | | Roth, not ROTH
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