You are new to the world of High Deductible Health Plans, and your new plan is   HSA eligible, or perhaps you have an HSA but haven't had the time to open a corresponding Health Savings Account.  Or you opened an HSA but have put no money in it this year.  With Christmas, Hanukkah and the general holiday season upon us, you are light on cash and thinking maybe you'll hold back on that contribution to your HSA.

You know in your mind that your healthcare is more important than the new Wii under the tree, but irrational spending behavior has taken over and that HSA contribution just ain't happenin'.

Here's the good news; December 31st 2008 is not D-Day for your HSA contributions.  Although it is for getting the account set up if you want to get the tax benefits of it on your 2008 tax returns.

As an individual you may contribute $2,900 to your HSA for 2008 and as a family you may contribute $5,800 to your HSA.   However, if you can't make it before the end of the year you're not SOL because if you fund the account before April 15th 2009, you can still take the tax deduction on your 2008 returns.   So if your brain is in the spend mode as opposed to the save mode, you get a 100+ day grace period to put $s into your account and still get the full tax advantages of your contribution.  But in order to get the benefit, you MUST set up your HSA account set up before the end of this year.  It's holiday season, can you say grace?

About this time every year employers all over the nation unveil their latest, greatest insurance offerings for the coming year. They've worked over their brokers, agents, and consultants, dusted off a few old tricks and brought a couple new ones to the game.  They've frosted up this package with Betty Crocker's finest, served it up on their finest china, put it on a fork and are now playing the "airplane" game with you.

Now you're probably thinking, "what's this hillbilly talking about?"  Tell me, am I right?  You've got your enrollment package, your employer is patting him or herself on the back at what a great job they did at keeping your premium from rising, or at least rising too much and you're saying, yeh, but what about my co-pays, why do I have to pay more for drugs, what about my deductible?

Health Savings Accounts are still relatively new, having just come into law at the end of 2003.  And every year, more and more employers are beginning to offer them to their employees.  Sometimes as an option for employees and sometimes as the only option for employees.

For the past couple of years, at this very time of year my friends come to me with quizzical and dim looks on their faces and begin asking me about the high deductible health plans (HDHPs) and health savings accounts (HSAs).  My friends are fairly bright folks, but as you know, the subject of insurance is about as exciting as a flat keg of beer at a fraternity band party.

They don't mind asking me about it because

And the answer is......maybe.  Sorry, black and whiters, that's just the way it is.

It depends on the type of free or in this case, discounted care you receive.  So as an example if your employer has a clinic where you can go for a flu shot, or say get your allergy shots, or maybe to get an aspirin when you have a headache, or maybe to have a wart looked at or maybe get some antiseptic and a bandaid if you cut yourself opening a box or something you would still be eligible for an HSA.

On the other hand if you work at say, a hospital, and you get your medical care for free or at a deep discount, sorry Charlie (or Charlene) No HSA For You!! 

Sorry, couldn't resist.

If you're really tuned into the world of Health Savings Accounts (HSAs) and High Deductible Health Plans this whole ‘Grab Bag' concept is yesterday's news to you.  That said, most folks reading this have probably never heard of it and I, while I have heard of it and perused it, have been avoiding it like the plague.

Despite of its thought provoking and generally stimulating name, ‘Grab Bag,' the thing is what it is.  It is also known as IRS Notice 2008-59.  I know the mention of the IRS causes many to break out in a cold sweat. 

For me, anything over about a page long causes me to break out in a cold sweat.  And this little baby is 28 pages of Q&A including a table of contents 3 pages long. 

The purpose of the document, issued by the Department of the Treasury and the IRS jointly is to clarify some outstanding questions regarding Health Savings Accounts (HSAs) and in some cases, throw a few new rules at us.  Generally speaking, clarification is good.   Next time they get around to issuing guidance on Health Savings Accounts, we will have a new administration, so this will be it under Bushy's watch.

Now the reason I've been avoiding this sucker like the plague is because anything over a page long is hard.  So you can imagine the general clinching that took place when I saw the table of contents.  It has taken me nearly a month to begin making an attempt to wrassle this monkey to the ground.

Rather than draft a 100 page article, it probably makes sense to break this puppy down into kibble sized bits and serve up the tastiest morsels one at a time.  If you'd like to study ahead, feel free to click on the link above.  If not, and I can hardly blame you.  Come back and read the next installment of The Gradock Bulletin.  We'll try to pick the most relevant parts of it to discuss and if possible we'll "put a little pepper on it slightly. "