NC health insurance HSA qualified medical expenses
The new North carolina health insurance HSA plans are a combination of two contracts. The first contract is a high deductible health plan fo NC health insurance expenses. The second contract is the actual Health Savings Account (HSA) that builds up funds tax-free as long as you don’t have any medical expenses during the year.
HSA distributions are tax-free if used for qualified medical expenses, as defined by Internal Revenue Code Section 213(d). Among medical expenses that qualify for HSA tax-free status are: Doctor’s Office Visits, Over-the-counter medications, Pre-deductible amounts, coinsurance, and other non-covered services, like LASIK eye surgery.
NC health insurance premiums are not qualified medical expenses, EXCEPT FOR the following: Qualified Long Term Care (LTC) insurance, COBRA health care continuation coverage, NC health care coverage while an individual is receiving unemployment compensation.
In addition, individuals over age 65 may use HSA funds to pay the following premiums: Medicare Part A and/or B, Medicare HMO, Premiums for employer-sponsored NC health insurance or employer sponsored retiree plan.
Non-qualified HSA distributions will be taxed as a part of gross income and will incur a 10% penalty. After age 65, the 10% penalty is dropped, though the distribution is still treated as taxable income.
HSA funds can be used to cover qualified medical expense incurred by the account holder, the account holder’s spouse, or any other
dependent.
If you have questions about the new North Carolina health insurance HSA plans available to you, contact your local NC health insurance agent or go to websites like this one at http://www.thackeragency.com
Category: Health
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