Monday, June 6, 2016

Ten HSA Questions Regarding Dependents, Retirement & Health Insurance

Health savings accounts help employees sock away money for health care costs. They’re used along with a high deductible health insurance plan, and they offer some great tax benefits.

Contributions made to HSAs lower one’s taxable income, and payments made from an HSA aren’t taxed. Plus, the funds can be invested and interest can accrue in an HSA — tax free.

Used with care, HSAs can be a smart financial tool. But they’re also potentially complex.

For better or for worse, the responsibility is on the employee to make sure he or she stays within the rules of the game. For some this is empowering. For others, it’s intimidating.

Whether someone already has an HSA or is considering one, keep reading to find out about 10 potentially weird, possibly little-known FAQs about HSAs.

10 HSA FAQs


  • What is the HSA eligibility rule regarding not being a dependent on someone else’s income tax return? If you are a dependent on someone else’s tax return, are you eligible for an HSA?

Answer: No. This rule serves primarily to prevent children from opening and funding HSAs. The rule does create some interesting scenarios for adult children.


  • Can HSA owners that enroll in Medicare use their HSA to pay for Medicare premiums even though they are no longer HSA-eligible?

Answer: Yes. The majority of Americans will start Medicare at age 65 and therefor lose eligibility for an HSA. Losing eligibility for an HSA means that the HSA owner cannot contribute new money but does not stop a person with an HSA balance from continuing to use that balance for medical expenses.

Thursday, June 2, 2016

Getting Married Soon? Give Social Security Your New Name

Every year, June marks the beginning of two busy seasons: summer and “wedding season.” With joyful expectation, many of us have already marked our calendars and started wrapping up our plans for the vacations, ceremonies, and honeymoons. While the betrothed work out the details, Social Security wants to remind them about one detail that’s extremely important: the “record” Social Security keeps of your life’s earnings.

For many people, a wedding often means a name change is in order. If you are legally changing your name, you need to apply for a replacement Social Security card reflecting your new name. If you’re working, also tell your employer. That way, Social Security can keep track of your earnings history as you go about living your wonderful new life.

If you have reported income under your former or maiden name, and didn’t inform SSA of a change, they might not have received an accurate W-2 and your earnings may have been recorded incorrectly. This is easier to fix now — when you first change your name — than years from now when you retire, when it may cause delays in receiving your benefits. This is important because they base your future benefits on your earnings record. So, visit their website at www.socialsecurity.gov/ssnumber, or call them at 1-800-772-1213 (TTY 1-800-325-0778), to find out what specific documents you need to change your name and to apply for a replacement card.

Last year, the Supreme Court issued a decision in Obergefell v. Hodges, holding that same-sex couples have a constitutional right to marry regardless of where they live within the United States. As a result, Social Security recognizes more same-sex couples as married for purposes of determining entitlement to Social Security benefits or eligibility for Supplemental Security Income (SSI) payments. They recently updated instructions for employees to process claims and appeals when a determination of marital status is necessary.