| Date | Event | Total paid out-of-
pocket | HSA
balance | Family
deductible
balance |
|---|
Jan.
1 |
Year begins. Your employer funds your HSA with $500. You decide to contribute $150 to your HSA at the end of each month. |
$0 |
$500 |
$2,400 |
Jan.
2 |
Your child breaks a leg sledding. You show your Priority Health ID card at the ER. |
$0 |
$500 |
$2,400 |
Jan.
2 |
Pick up a $20 prescription at a drug store. Pay with your HSA debit card. (Ask for and get a generic drug; the brand-name version is $85.) |
$0 |
$480 |
$2,400 |
Jan.
10 |
The pharmacy bills Priority Health $0 for the prescription. We apply the $20 you paid to your deductible. |
$0 |
$480 |
$2,380 |
Jan.
10 |
The hospital bills you for the $500 ER visit, and copies Priority Health, so PH applies it to the deductible. |
$0 |
$480 |
$1,880 |
Jan.
15 |
You write the hospital a personal check, then mark the bill paid with the check number and date, and save it in your HSA "To be reimbursed" receipts folder. |
$500 |
$480 |
$1,880 |
Jan.
30 |
$150 pre-tax payroll deduction to your HSA, reducing your taxable income. |
$500 |
$630 |
$1,880 |
Feb.
10 |
You write yourself a check from your HSA account to reimburse yourself for the $500 hospital visit. You mark the ER invoice as "Reimbursed on 2/10/20XX." Save all your paid HSA receipts in a folder in case the IRS ever wants to see them. |
$0 |
$130 |
$1,880 |
Feb.
28 |
$150 pre-tax payroll deduction to HSA |
$0 |
$280 |
$1,880 |
Mar.
30 |
$150 pre-tax payroll deduction to HSA |
$0 |
$430 |
$1,880 |
Apr.
30 |
$150 pre-tax payroll deduction to HSA |
$0 |
$580 |
$1,880 |
May
30 |
$150 pre-tax payroll deduction to HSA |
$0 |
$630 |
$1,880 |
June
8 |
You get a physical. Preventive care is 100% covered. |
$0 |
$630 |
$1,880 |
June
30 |
$150 pre-tax payroll deduction to HSA |
$0 |
$780 |
$1,880 |
July
30 |
$150 pre-tax payroll deduction to HSA |
$0 |
$830 |
$1,880 |
Aug.
21 |
Your child gets a physical and shots. 100% covered. |
$0 |
$830 |
$1,880 |
Aug.
30 |
$150 pre-tax payroll deduction to HSA |
$0 |
$980 |
$1,880 |
Sep.
30 |
$150 pre-tax payroll deduction to HSA |
$0 |
$1,130 |
$1,880 |
Oct.
30 |
When your account totals more than $1,000, your bank begins to pay you a little interest on the balance. |
$0 |
$1,135 |
$1,880 |
Oct.
30 |
$150 pre-tax payroll deduction to HSA |
$0 |
$1,285 |
$1,880 |
Nov.
28 |
Doctor visit for your child, who has a bad cough. Just show your ID card. |
$0 |
$1,285 |
$1,880 |
Nov.
30 |
$150 pre-tax payroll deduction to HSA + $5 interest from bank |
$0 |
$1,440 |
$1,880 |
Dec.
10 |
Your doctor bills you $100 for the visit, copying Priority Health. PH applies that $100 to your deductible. |
$0 |
$1,440 |
$1,780 |
Dec.
12 |
You pay your doctor bill using an HSA bank account check. You mark the invoice "Paid from HSA" with the date and file it in your HSA paid receipts folder, in case the IRS ever wants to see it. |
$0 |
$1,340 |
$1,780 |
Dec.
31 |
$150 pre-tax payroll deduction to HSA + $5 interest from bank |
$0 |
$1,490 |
$1,780 |
|
Your bottom line
You reduced your taxable income by $1,800 ($150 X 12 months).
You spent: $1,800 on contributions to your HSA. $0 in other medical expenses.
You received:
$ 620 in paid medical care expenses, plus 2 physical exams
+ 1,490 in your HSA, available whenever you need it
= $2,110 (plus your tax savings). |
|
$1,490 |
(resets each plan year) |
