Another Idiot Republican

[countryroads89_rivals]

doing stupid ****, as usual.

S.85 — 115th Congress (2017-2018) A bill to amend the Internal Revenue Code of 1986 to repeal the amendments made by the Patient Protection and Affordable Care Act which disqualify expenses for over-the-counter drugs under health savings accounts and health flexible spending arrangements. Sponsor: Sen. Roberts, Pat [R-KS] (Introduced 01/10/2017)

A Republican Senator, Pat Roberts from Kansas, introduced a bill to not allow over the counter drugs to qualify as an eligible expense in your flexible health spending account.

I encourage any of you to take advantage of this opportunity for another tax deduction, utilizing a flexible health savings/spending account, if you are not already doing so.

 

[EEResistable]

I'm not sure what this means. People can buy aspirin with their health savings account? Is that what it means? And he wants to disqualify that?

 

[countryroads89_rivals]

I'm not sure what this means. People can buy aspirin with their health savings account? Is that what it means? And he wants to disqualify that?

Yes, exactly.

 

[EEResistable]

Yes, exactly.

That's stupid. I agree.

 

[WVUCOOPER]

Yes, exactly.

Actually I think it's the exact opposite. Here is what the ACA did:

2. How are the rules changing for distributions from health savings accounts (HSAs) and Archer Medical Savings Accounts (Archer MSAs) that are used to reimburse the cost of over-the-counter medicines and drugs?

A. In accordance with Section 9003 of the Affordable Care Act, only prescribed medicines or drugs (including over-the-counter medicines and drugs that are prescribed) and insulin (even if purchased without a prescription) will be considered qualifying medical expenses and subject to preferred tax treatment.

I think this takes it back to where you can buy sudafed with your HSA card w/o a prescription. Or aspirin.

 

[countryroads89_rivals]

Actually I think it's the exact opposite. Here is what the ACA did:

2. How are the rules changing for distributions from health savings accounts (HSAs) and Archer Medical Savings Accounts (Archer MSAs) that are used to reimburse the cost of over-the-counter medicines and drugs?

A. In accordance with Section 9003 of the Affordable Care Act, only prescribed medicines or drugs (including over-the-counter medicines and drugs that are prescribed) and insulin (even if purchased without a prescription) will be considered qualifying medical expenses and subject to preferred tax treatment.

I think this takes it back to where you can buy sudafed with your HSA card w/o a prescription. Or aspirin.

I hope you are correct, but as it stands right now, all of those things are currently reimbursable expenses for me, including band aids, saline solution, etc.

Why would a bill be needed if those type of things are already deductible?

 

[WVUCOOPER]

I hope you are correct, but as it stands right now, all of those things are currently reimbursable expenses for me, including band aids, saline solution, etc.

They aren't. That law changed in 2011.

A. If you have an HSA or an Archer MSA, distributions for expenses that are not qualifying medical expenses (including over-the-counter medicines and drugs purchased without a prescription) will be included in your gross income and subject to an additional tax of 20%. The income tax and additional tax are reported on Form 8889 for an HSA distribution and on Form 8853 for an Archer MSA distribution. You complete these forms and attach them to your Form 1040 when you file your income tax return. Distributions from an HSA or an Archer MSA are not included as taxable wages and do not affect your Form W-2.

 

[WVUBRU]

Over the counter drugs and other items purchased on HSA's were terribly abused before the ACA. I'm in full support of excluding the purchase of non-prescription drugs to be allowed to be purchased with pre-tax dollars. Therefore, I support this item of the ACA.

If I am not mistaken, this was part of the ACA as it costs a fortune to monitor and maintence the abuses of HSA participants in their purchases of unqualified items. In order to reduce some red tape and costs of providers, this is an essential part.

 

[WVUCOOPER]

Over the counter drugs and other items purchased on HSA's were terribly abused before the ACA. I'm in full support of excluding the purchase of non-prescription drugs to be allowed to be purchased with pre-tax dollars. Therefore, I support this item of the ACA.

If I am not mistaken, this was part of the ACA as it costs a fortune to monitor and maintence the abuses of HSA participants in their purchases of unqualified items. In order to reduce some red tape and costs of providers, this is an essential part.

How was the IRS supposed to track over the counter purchases? Good luck with that.

Now if they are out booking vacations with their HSA cards. then yeah....it's a little easier to spot and should definitely be dealt with.

 

[countryroads89_rivals]

Over the counter drugs and other items purchased on HSA's were terribly abused before the ACA. I'm in full support of excluding the purchase of non-prescription drugs to be allowed to be purchased with pre-tax dollars. Therefore, I support this item of the ACA.

If I am not mistaken, this was part of the ACA as it costs a fortune to monitor and maintence the abuses of HSA participants in their purchases of unqualified items. In order to reduce some red tape and costs of providers, this is an essential part.

I have (obviously) never had to rely on those types of expenses to meet my annual withholdings for my expenses. I really can't see people signing up for an HSA and "abusing" turning in those types of expenses when you have to save receipts, scan them, e-mail them to your "coordinator" and log onto some website and fill out a form and then be reimbursed.

They are still health related expenses - so what if I didn't have to see a doctor or get a prescription - Preparation H still cures the hemorrhoids.

 

[WVUBRU]

How was the IRS supposed to track over the counter purchases? Good luck with that.

Now if they are out booking vacations with their HSA cards. then yeah....it's a little easier to spot and should definitely be dealt with.

IRS doesn't. Each institution offering HSA accounts have to. It is all done electronically off of the various codes of the Point of sale systems of retail establishments that sell pharmacy stuff that could be part of an HSA. Then when the electronic payment goes through, the institution gets an itemized report to their db of what is purchased. The institution is responsible for monitoring and maintaining their client's relationship with their account. Huge headache and much expense is involved with all the various parties.

 

[WVUBRU]

I have (obviously) never had to rely on those types of expenses to meet my annual withholdings for my expenses. I really can't see people signing up for an HSA and "abusing" turning in those types of expenses when you have to save receipts, scan them, e-mail them to your "coordinator" and log onto some website and fill out a form and then be reimbursed.

They are still health related expenses - so what if I didn't have to see a doctor or get a prescription - Preparation H still cures the hemorrhoids.

I agree and if everyone followed laws and regulations, this world would work much better. But for any law or regulation, there will be people attempting to beat the system on purpose or by accident. Using pretax dollars incorrectly has a very healthy return and is a better "investment" than the market for those that want to attempt to beat the system. I would advise not to attempt to beat the system. It can be a huge pain in the rear to correct a problem, large violations can be reported to law enforcement and almost certainly, the institutions managing the accounts will report to the credit agencies and it will affect one's credit report. I assure you that can be more painful than what that Preparation H is fixing.

 

[WVUCOOPER]

IRS doesn't. Each institution offering HSA accounts have to. It is all done electronically off of the various codes of the Point of sale systems of retail establishments that sell pharmacy stuff that could be part of an HSA. Then when the electronic payment goes through, the institution gets an itemized report to their db of what is purchased. The institution is responsible for monitoring and maintaining their client's relationship with their account. Huge headache and much expense is involved with all the various parties.

Hmmmm. My insurance company has never asked me for anything. Just swipe my HSA benefits card and move on. Being a complete sociopath I keep my records in case of an IRS audit.

 

[WhiteTailEER]

IRS doesn't. Each institution offering HSA accounts have to. It is all done electronically off of the various codes of the Point of sale systems of retail establishments that sell pharmacy stuff that could be part of an HSA. Then when the electronic payment goes through, the institution gets an itemized report to their db of what is purchased. The institution is responsible for monitoring and maintaining their client's relationship with their account. Huge headache and much expense is involved with all the various parties.

My FSA card is preloaded with my deductibles for the year from my employer. They keep bugging me for receipts and EBO's, but I never send them. The charge is directly from a doctor's office or from the pharmacy, so they should be able to figure that **** out.

 

[WVUCOOPER]

IRS doesn't. Each institution offering HSA accounts have to. It is all done electronically off of the various codes of the Point of sale systems of retail establishments that sell pharmacy stuff that could be part of an HSA. Then when the electronic payment goes through, the institution gets an itemized report to their db of what is purchased. The institution is responsible for monitoring and maintaining their client's relationship with their account. Huge headache and much expense is involved with all the various parties.

To take advantage of your HSAs tax benefits, you'll have to report your HSA activity to the IRS.

Your responsibilities
It's up to you to keep track of receipts for expenses you pay for with your HSA. You'll get tax forms that detail your distributions for the year. If any of your distributions were used for non-qualified medical expenses, you are responsible for:

• Reporting that to the IRS on IRS Form 8889
• Paying income taxes on the amount
• Possibly paying an additional 20 percent penalty

 

[WVUBRU]

Hmmmm. My insurance company has never asked me for anything. Just swipe my HSA benefits card and move on. Being a complete sociopath I keep my records in case of an IRS audit.

Unless you violate in a very obnoxious way, you most likely won't ever get caught. This has been a pain in the retail, insurance and banking industries and they all supported this amendment of the ACA as it made it much easier on them. The banking industry is lobbying hard against the repeal of this part of the ACA.

 

[WVUBRU]

To take advantage of your HSAs tax benefits, you'll have to report your HSA activity to the IRS.

Your responsibilities
It's up to you to keep track of receipts for expenses you pay for with your HSA. You'll get tax forms that detail your distributions for the year. If any of your distributions were used for non-qualified medical expenses, you are responsible for:

• Reporting that to the IRS on IRS Form 8889
• Paying income taxes on the amount
• Possibly paying an additional 20 percent penalty

That is correct. The individual is responsible for his own financial transactions, as you well know. That is additional to my commentary.

 

[WVUCOOPER]

Unless you violate in a very obnoxious way, you most likely won't ever get caught. This has been a pain in the retail, insurance and banking industries and they all supported this amendment of the ACA as it made it much easier on them. The banking industry is lobbying hard against the repeal of this part of the ACA.

BTW I actually had a potential tax client last year tell me how he would charge his family vacation on a credit card, pay the card's balance with his HSA money and reap the airline miles. He legitimately thought what he was doing was legal. We decided to pass on his business.

 

[dave]

How was the IRS supposed to track over the counter purchases? Good luck with that.

Now if they are out booking vacations with their HSA cards. then yeah....it's a little easier to spot and should definitely be dealt with.

When I used an HSA I would present the card when I made purchases at Walgreens for instance. When I bought prescriptions or purchased anything else. Two days later I would get a check from the HSA reimbursing me from my withholdings for the qualifying purchases. I didn't have to know what did and didn't qualify, I was reimbursed for things that qualified. Drugs, contact lense solutions, come OTC drugs etc.When I had met the withholding limit the checks would stop coming until the next year. This was back prior to 2007.

 

[WhiteTailEER]

When I used an HSA I would present the card when I made purchases at Walgreens for instance. When I bought prescriptions or purchased anything else. Two days later I would get a check from the HSA reimbursing me from my withholdings for the qualifying purchases. I didn't have to know what did and didn't qualify, I was reimbursed for things that qualified. Drugs, contact lense solutions, come OTC drugs etc.When I had met the withholding limit the checks would stop coming until the next year. This was back prior to 2007.

I have inadvertently tried to use mine for unqualified purchases ... like picking up toothpaste or something and then just paying for everything at the pharmacy window together. My card was rejected because of the toothpaste ... so I've never understood why they keep asking for receipts and everything because it simply won't work if something isn't a valid use.

 

[WVUCOOPER]

When I used an HSA I would present the card when I made purchases at Walgreens for instance. When I bought prescriptions or purchased anything else. Two days later I would get a check from the HSA reimbursing me from my withholdings for the qualifying purchases. I didn't have to know what did and didn't qualify, I was reimbursed for things that qualified. Drugs, contact lense solutions, come OTC drugs etc.When I had met the withholding limit the checks would stop coming until the next year. This was back prior to 2007.

My card works just like a credit card, so no need to be reimbursed, but my account is attached to my checking and savings account. @ weeks ago I went to see my eye doctor and forgot my card, so I paid for it on my debit card and then transferred the cost from my HSA to my checking account. I've yet to have any issue doing this.

 

[WVUBRU]

I have inadvertently tried to use mine for unqualified purchases ... like picking up toothpaste or something and then just paying for everything at the pharmacy window together. My card was rejected because of the toothpaste ... so I've never understood why they keep asking for receipts and everything because it simply won't work if something isn't a valid use.

Exactly. The retail establishment is on top of complying and their Poing of Sale system and IT has things set up correctly with the UPC codes. Behind the scenes, it is even more complex and advanced. It is a very costly operation and when non-prescription items were allowed, it was even worse. Now, the retail establishment can just code items not covered not to be accepted by an HSA credit card that is also properly maintained. Problem there is financial institutions are not putting the proper IT behind their credit card operations restricting the HSA card so there are holes in this entire process.