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Medical Sharing Costs Count as High Deductible for Health Savings Accounts?

Forum|Forum|3 years ago
August 24, 2022
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I am a single employee of a S corp, as well as the President, and I do not have medical insurance, so I use Christian Health Ministries (Medical Sharing) as my MedSharance provider. I want to contribute to my already established Health Savings Account, but unsure if the restrictions have changed on what qualifications I need to have to make an annual deposit. In the past, before Obamacare, you had to have a high deductible medical insurance account (don't know why) in order to donate to your own Health Savings Account. Please advise on the status of the HSA requirements. Thanks.

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Best answer by NCPERSON1

here are the qualifications :

Qualifying for an HSA Contribution
To be an eligible individual and qualify for an HSA contribution, you must meet the following requirements.
• You are covered under a high deductible health plan (HDHP), described later, on the first day of the month.
• You have no other health coverage except what is permitted under Other health coverage, later.
• You aren’t enrolled in Medicare.

see page 4 specifically

https://www.irs.gov/pub/irs-pdf/p969.pdf

High deductible health plan (HDHP). An HDHP has:
• A higher annual deductible than typical health plans,
and
• A maximum limit on the sum of the annual deductible and out-of-pocket medical expenses that you must pay for covered expenses. Out-of-pocket expenses include copayments and other amounts, but don’t include premiums

N

NCPERSON1Answer

here are the qualifications :

Qualifying for an HSA Contribution
To be an eligible individual and qualify for an HSA contribution, you must meet the following requirements.
• You are covered under a high deductible health plan (HDHP), described later, on the first day of the month.
• You have no other health coverage except what is permitted under Other health coverage, later.
• You aren’t enrolled in Medicare.

see page 4 specifically

https://www.irs.gov/pub/irs-pdf/p969.pdf

High deductible health plan (HDHP). An HDHP has:
• A higher annual deductible than typical health plans,
and
• A maximum limit on the sum of the annual deductible and out-of-pocket medical expenses that you must pay for covered expenses. Out-of-pocket expenses include copayments and other amounts, but don’t include premiums

C

CatDudeAuthor

Thank you for the info; I'm trying to understand the rationale for limiting who can save for their Health Benefits.

Why does the government want to limit the people who can contribute to an HSA? Just a guess would be helpful.

N

NCPERSON1

@CatDude - a guess:

it's not that the government wants to limit who is eligible for the HSA, I think it's just that who can deduct medical expenses is based on a patchwork of laws that passed over time.

1) medical expenses are deductible as an itemized deduction (with limits that exceed 7.5% of income). In effect those that take the standard deduction may be getting a benefit greater than those medical expenses, so include those medical expenses as deductible as well.

2) Medical premiums are also either deductible as itemized deductions (exclude Medicare) or as a deduction for self-employed or are paid in pre-tax funds from a paycheck

3) FSA accounts is another way to pay medical expenses with pre-tax dollars and was established way before the HSA

4) HSA were establised in 2003 and created another way to pay for expenses with pre-tax dollars and it permits investing those dollars to boot!

So I don't see it as the government wanting to exclude folks from HSAs, but simply the other way around. Meaning Congress looks for different approaches for the federal government to pay for medical costs over time and based on who is in power and what agendas are set, medical deductibility and ways to pay on a pre-tax basis has expanded over time.

HSA's filled a gap in 2003 and it's simply the way Congress passed the law.

just my two cents