Reimbursement From Medical Savings Account
We (my husband and I) belong to the Medical Savings Health Plan and I am confused on how to go about using the money in the MSA to pay ourselves back since we pay medical bills out of our pocket. Can you help me?
You may request a tax-free withdrawal from your Medical Savings Account for eligible medical expenses as defined by IRS Publication 502. The bank or lending institution that administers your medical savings account should provide you with a reimbursement form, along with instructions on how to submit this form for reimbursement. The funds will come out of your medical savings account, but the withdrawal will not have a tax penalty. You should make a copy of this reimbursement form and keep it along with the receipts for medical treatment for your personal tax records. Most banks that manage medical savings accounts will not require proof of your medical expenses and will just ask for the total amount to be reimbursed (withdrawn). Check with your bank for the specifics on what they require, which should also be outlined on the reimbursement form. The IRS may require proof that the reimbursement was for tax-exempt medical expenses as defined in Publication 502, so make sure to keep all applicable documents and receipts to provide to your tax accountant in the event that they are requested.
The list of includible medical and dental expenses is quite extensive, and most people overlook many of these expenses as being eligible for MSA / HSA reimbursement. Make sure you familiarize yourself with Publication 502 so you can get the most benefit out of your MSA. The bank where you set up your medical savings account should be able to provide you a copy of this publication.
Would it make sense to get a high deductible health plan AND get a health savings account, if you are trying to get pregnant? I have college student health insurance which is an individual health insurance policy but it does not have maternity coverage. The monthly premium is also quite high so we are considering to switch to a different plan, possibly a high deductible health plan and then use a health savings account to pay the ongoing medical bills. The insurance with maternity riders are really expensive, so we are hoping that the money we can save from having a HSA will be enough to cover the hospital maternity bill.
Comment by Mary B. — June 24, 2009 @ 2:08 am