Having a Health Savings Account (HSA) comes with many perks. There are the tax-free contributions, withdrawals, and growth; flexible spending options for many qualified healthcare expenses; and account ownership for life. One frequently asked question for HSA owners is whether or not there is an HSA claim time limit. Find out more below.
If you’ve participated in a Flexible Spending Account (FSA) in the past, you’re likely aware of the time limits for those accounts. During each plan year (typically January 1-December 31) participants use their money and submit claims to get reimbursed. Following the end of the plan year, if you have unfiled claims, you risk not being able to get reimbursed for those expenses.
However, some plans have a run out period. Basically, it’s extra time (usually 90 days) after the plan year ends for people to submit claims for the previous year. Consider this scenario: you visited the dentist in July 2020. However, you forgot to file the reimbursement claim by December 31. If your plan has a 90-day run out period, you would have until March 31, 2021 to file that claim.
In short, no. One of the many benefits of an HSA is the flexibility for claims filing. Use-it-or-lose-it does not apply, but when you opened the account does matter.
Let’s say that you opened the HSA in January 2019. You could not file a claim for expenses that you incurred prior to opening the account (like in December 2018). However, you do have an unlimited time frame to file claims for expenses that happened after opening the HSA.
For example, in February 2019, you had to buy some prescription eyeglasses, but did not have the available funds in your account to pay for it. After you build up your balance, you could then file your claim at a later date and get reimbursed, even if it is in 2020 (or beyond).
You should make it a steadfast rule to keep all of your healthcare receipts and related documents. This paperwork validates your claims and ensures a smooth reimbursement process.Remember that receipts need to show the following information:
There is a time limit for HSA contributions. Each year, the IRS places limits on how much and how long you can contribute to your account. You do have an extended period for making contributions for the previous year – usually up to the income tax filing deadline (April 15, in most years).
If you also have a Limited Purpose FSA through your employer in addition to an HSA, you are not allowed to double dip. In other words, you cannot get reimbursed from your LPFSA and later file a claim for reimbursement from your HSA (and vice versa).
An LPFSA can be used for qualified dental and vision expenses. FSA time limits do apply to Limited Purpose FSA. Refer to your Summary Plan Description for more details.
With an HSA, time is on your side. You don’t have to worry about running out of time to file your HSA claim.
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