What’s up with Health Savings Accounts?
I’ve read the wikipedia, IRS site, etc and still have questions. An answer to even just part would be greatly appreciated:
1. I’ve read the yearly limit is around $2900, is that CONTRIBUTION limit or a BALANCE limit?
2. What is my (essentially) lifetime limit? In other words, if during year 1 I spend $0, then by the end of year 2, I could theoretically (if nothing changes) have a balance of $5,800, correct?
3. If I have some kind of emergency and need to tap into that money, HOW do I pay the tax/penalty on it?
3b. How much of a penalty are we talking about?
4. Considering my HDHP has a $3000 yearly out of pocket maximum. Can the Health Insurance carrier ‘see’ my other costs (that it will not pay anything for), such as lasik, and can that be subtracted for my out of pocket maximum purposes?
4b. So this must mean that my insurance company somehow can see my HSA balance and transactions? That doesn’t seem to make sense.
5. How closely does the IRS watch?
Joseph Hatchet
