If you put money in a health care spending account and don't use it where does it go?

[Tap]

If hsa $$ aren't spent, the patient looses the money. But who does get it? Is it the company that the employer hires to manage the accounts? or is it the employer? or the tax man?

 

Where is the thousands of patients money going?

 

 

Every year at this time we start getting patients who buy carts full of medications that they don't need, just to use up the money in these accounts. I figure there are thousands of people that I don't see, who just let the money quietly slip away. I am curious if anyone knows where it goes....and I would be especially interested to know ...

 

Who are these unique companies that can hold money for someone to use tax free for certain purposes? Why can't the money be given back to the patient (and subsequently taxed) ? Why can' the patient claim the same benefit on their tax return themselves (like the daycare spending account)? To claim medical expenses on a tax return, the pt has to have significant medical costs, very different from an hsa.

 

 

I have had some years when I used an HSA (dh and I both got braces that year) and I have had years where I haven't (this year) becuase barring an unexpected event, we would never use enough to justify it.

 

 

 

What say you? :bigear:

[Cheryl in NM]

According to our company it's the FHSA (Flexible Health Spending Account) that the money is forfeited and it is due to IRS regulations. They don't say where the money goes, though. Maybe the IRS? We might try one of these this year, but not put too much money into it. This whole insurance thing is getting so hard to sort out! I want to pay my doc in eggs and chickens!

[newlifemom]

According to our company it's the FHSA (Flexible Health Spending Account) that the money is forfeited and it is due to IRS regulations. They don't say where the money goes, though. Maybe the IRS? We might try one of these this year, but not put too much money into it. This whole insurance thing is getting so hard to sort out! I want to pay my doc in eggs and chickens!

 

AMEN

[Kathy in MD]

It is returned to the employer.

 

Correction - the money placed in flexible health savings accounts (and/or child care) is what's returned to the employer.

Edited November 5, 2008 by Kathy in MD
mistaken terminology

[sassenach]

HSA's don't "expire." Flex accounts do. I have no idea where the money goes. Good question.

[Alice]

With our HSA the money rolls over. You can keep it which is nice, some years we may have bigger expenses than others and this helps us save.

[Kathy in MD]

HSA's don't "expire." Flex accounts do. I have no idea where the money goes. Good question.

 

ARGGG! You're right. I got my terminology mixed up. I'll correct my post.

[MommyX8]

We used to have a forfeiture date of 12/31, but now the company has an agreement that expenditures through 3/15 of the next year are also included.

 

So, it all depends on the contract with your employer.

 

I have $2000 in my FSA still. Even though they "tell" me that I have until March, I still plan to buy lots of contacts, glasses, and OTC stuff.

[Cheryl in NM]

It is returned to the employer.

 

Correction - the money placed in flexible health savings accounts (and/or child care) is what's returned to the employer.

 

Why would it be returned to the employer? It's money that the employee put into the account tax-free.

 

We used to have a forfeiture date of 12/31, but now the company has an agreement that expenditures through 3/15 of the next year are also included.

 

So, it all depends on the contract with your employer.

 

I have $2000 in my FSA still. Even though they "tell" me that I have until March, I still plan to buy lots of contacts, glasses, and OTC stuff.

 

I forgot, our employer is offering the 3/15 thing this year also. This will be our first year. I'm so nervous, but I was so mad when I added up the difference in my out-of-pocket spending on the traditional plan we have now and a consumer driven plan!

[GWOB]

Ok. I'm now to the whole Civilian health care thing,but as I understand it, Health Savings Accounts roll over. Whatever you put in you will get out. Our employer matches our contributions up to a certain amount. Flex spending plans (I think they're called 125's or something like that) are not as flexible. Whatever you don't use at the end of the year goes to support the underground Dwarf Liberation Movement and research on the uses of pixie dust.

[Kathy in MD]

Why would it be returned to the employer? It's money that the employee put into the account tax-free.

 

 

 

I forgot, our employer is offering the 3/15 thing this year also. This will be our first year. I'm so nervous, but I was so mad when I added up the difference in my out-of-pocket spending on the traditional plan we have now and a consumer driven plan!

 

The reason your employer gets any unused money back is because of the law that set up the flex account to begin with. At least I assume it was written in the actual law and not an IRS regulation. I don't know why the the law was written this way. I can make some wild guesses, but I don't know.

[G5052]

DH works for Uncle Sam, and it goes back into Uncle Sam's pocket IF we don't spend it all. With his medical expenses, that's never the case though. I use it basically as a "savings" account for his larger expenses, and we somehow pay the rest. My folder of unreinbursed medical expenses is thick and we only have about $300 left right now.

 

For some reason though he always thinks that when it comes in we can spend a little more. Nope. Not unless you want to pay the bills from now on ;).