[1]In organizing our important documents, we completed Box 1 [2] and continue working on Box 2 [3].
Having finished the first three categories [4] in our insurance file, we begin category 4: tax-favored programs.
If you have multiple types of tax-favored programs and need more than one file slot, then adjust this system to work for you.
My single file opening houses the following types of documents:
Tax-Favored Programs
- Health Savings Account
- Pre-Tax Group Insurance Premium
- Spending Accounts
- Medical Spending Account
- Dependent Care Spending Account
Health Savings Account
Defined
A Health Savings Account (HSA) is a tax-free account used to pay health care expenses. Though Paul and I do not now hold a health savings account, we once did.
We opened our account through Paul’s employer. The designated amount we chose to contribute to this account was automatically deposited during each pay period. We owned the account, and the funds, including interest, accumulated tax-free.
Note: With a HSA, the funds do not have to be spent in the plan year. This means that you can contribute up to the maximum each year and continue accruing interest for years.
After contributing to our HSA and then changing plans, we continued to use the remaining funds in our HSA for our qualified medical expenses. When we exhausted the funds, we closed our account.
Eligibility
To contribute to a HSA, you
- Must be covered by a high-deductible health plan,
- Cannot be covered by any other health plan, including Medicare, and
- Cannot be claimed as a dependent on another person’s tax return.
Documents
When we held our HSA, I kept the following documents in this file opening:
- Enrollment paperwork
- Annual payroll contribution records
- Monthly statements from our financial institution
- Copies of the front and back of our Visa debit cards
- Correspondence from Paul’s employer and from the financial institution
These documents were paper clipped together and housed in this file opening.
To get another perspective, Jim Wang of bargaineering.com offers a HSA vs. HMO Analysis [5] from the experiences of one of his loyal readers. Jim will be guest posting on Using Time Wisely this Wednesday, March 28, so come back for more valuable information on ways to using your time wisely.
As you continue gathering and filing your important insurance documents, you are using time wisely. Enjoy looking back to admire your progress because you are doing great. Happy organizing!
Question: Do you prefer a HSA, HMO, or PPO?