Additional Health Care Planning

This will be the last of three blog posts concerning health care. I just completed truck research and will get that posted soon.  I’ve come up with a short list of trucks I’m interested in as well as an idea of how we intend to purchase one and when. 

Snap 2017-04-10 at 19.18.44
On the home front, Karen now has an
Instant Pot and loves it.  Three people at work also bought one and we all plan to share recipes. Karen made the best spaghetti she has ever made, browning the meat, putting in the sauce and noodles without dirtying any other dishes. And the chicken wings she cooked up were as good as any restaurant. 

 

Now on to health care.  I want to mention a few notes about legislature that’s in the works as well as a seldom known way to fund a Health Savings Account if you have a high deductible health insurance plan.

In an earlier post I mentioned how a co-worker uses a doctor who does not except insurance. His doctor is following this blog. On Dr. Rigg’s website there is a link to the Primary Care Enhancement Act of 2017 as well as a host of information concerning health care reform.

Per congress.gov  “this bill will permit an individual to pay primary care service arrangement costs from a health savings account; and allow an eligible taxpayer enrolled in a high-deductible health plan to take a tax deduction for cash paid into a health savings account, even if the taxpayer is simultaneously enrolled in a primary care service arrangement. Under a primary care service arrangement, an individual is provided coverage restricted to primary care services in exchange for a fixed periodic fee or payment for such services. For the purposes of certain tax-deductible expenses for medical care, the bill expands the definition of “medical care” to include periodic provider fees, including: (1) periodic fees paid to a primary care physician for a defined set of medical services or the right to receive medical services on an as-needed basis; and (2) pre-paid primary care services designed to screen for, diagnose, cure, mitigate, treat, or prevent disease and promote wellness.”

If I understand it correctly, this would allow an individual to pay a monthly fee to their doctor who provides primary care services for basic medical needs. And one could make the payments from a tax-exempt Health Savings Account (HSA) which might be a reason it is contested. In other words, this would become a form of health insurance whereby the darn insurance company (and their profits) are taken out of the equation.

Regarding funding a Health Savings Account (HSA): Karen and I are doing this through a plan at work whereby my employer also contributes money. At retirement, I hope to have built the account up. I’ll turn 55 years of age next year and will take advantage of the catch-up rule where I can contribute an additional $1,000 on top of the maximum allowed for a family. I just found out the law allows a once in a lifetime contribution to an HSA from an IRA.  I think this one-time transfer would be rarely used but might be a way to fund an HSA if one does not have the cash during a given year to make a contribution to an HSA. Here are my notes:

One time transfer of IRA money to a HSA account. The once-in-a-lifetime transfer from an IRA to an HSA does not increase the maximum you can transfer is your normal HSA contribution limit. In other words it’s not on top of your normal contribution limit. If you do the transfer, it reduces dollar-for-dollar the amount you can contribute in other ways, either directly or through your employer. The transfer from your IRA to your HSA is not taxable, but you also lose the tax deduction you otherwise would get if you contribute normally. If you do the transfer you must also commit to staying with an HSA-eligible high deductible health plan for 12 months. If you fail the commitment, the transfer becomes taxable and you’d have to pay a 10% penalty. The benefit is that the transferred funds and all earnings thereon could eventually come out tax-free, provided they are used for medical expenses. A qualified transfer from an IRA to HSA once you are on Medicare is not allowed.

  • As a side note, government rules allow an investor to distribute IRA funds to pay for medical expenses. The 10% early distribution penalty may be avoided if proceeds are distribution prior to 59½. So you don’t need to move money from an IRA to an HSA to use it for medical expense. However there are special rules such as if you spend out of the IRA that years medical expenses must be at least 10% of your adjusted gross income.
  • For 2017 the IRS defined “high deductible” as any deductible higher than $1,300 for an individual or $2,600 for a family, so your health insurance plan has to meet that threshold for you to qualfy for an HSA.
  • My HSA has investment options so I would not be losing what the IRA savings would have earned through investment. 

Do your own homework before you decide to transfer money to an HSA from an IRA.

new flash Here is an interesting web site: Travel Tax.com – from Camper Cornicles blog.

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6 thoughts on “Additional Health Care Planning

    • Thanks for following the blog Mary Ann and for the recipe link. So far Karen has perfected chicken wings and BBQ chicken, spaghetti and pork chops with applesauce. Three other people at work also bought an Instant Pot and know we all plan to share recipes that we tested. There has been a little trial and error associated with trying to figure out how cook with the Instant Pot. Karen is loving it and the 6 quart version works perfect for us. I’ll send Karen the link to the Chicken Tikki Masala.

      Are you guys Rving now or planning for it in the future?

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      • We just bought a Grand Design 303 RLS 5th wheel and Ford F350. Our plan is to sell our now kid-less large home in Pennsylvania and (hopefully) spend a couple of years being fulltimers before settling down in Oregon or Washington. We owned a 19′ TT /Pathfinder for 3 years and found that although we really enjoyed being away from home, worries about our home and the small space of our TT made us decide to go this route since we were planning on moving anyway. Change is very stressful, many sleepless nights since buying this new RV. We’re making our shake down trip in a couple of weeks.

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      • Fantastic fifth wheel selection Mary Ann. Toured the Grand Design Reflection two years ago at the local RV show. It was my favorite in the class.

        Thanks for posting. It really helps to hear what others are planning. Having a two year target for travel before you settle down is a great way to go. Karen and I are going to attempt six years. A long time traveler told me most don’t stay on the road past five years. We are in the same boat as you plus have dogs we don’t like to leave at home with dog sitters. I could do without dogs but they are a big part of Karen’s life. We never planned to retire in our current house as the land/yard and all the other maintenance is not the way I would want to spent my retirement time doing. Part of our decision to go fulltime also had to do with being in between homes.

        We have not made a decision on a storage unit yet. Have you? Right now we are leaning towards keeping a very small storage unit for items that we can’t replace such as art work. We also think it would be in our home town where we could leave stuff we might want on the road or maybe some tools and such. The valuable smaller stuff we might leave with our daughter in a couple totes. It’s a hard decision because leaving anything of value in a storage unit is a risk because of theft. I have an advantage being law enforcement in the area. I know which storage facilities are prone to theft and which facility owners really pay attention to security and those that don’t. I also know what thieves tend to steal and which locks they avoid. That might come in handy.

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      • We have a dog as well, exact feelings about them as you – my husband would gladly have none, but Bandit’s part of the family. I will not be in a hurry to get another dog once he’s gone because of the constraints of dog ownership at this time in our lives.
        My oldest daughter’s boyfriend has offered us storage in his property in Oregon, as long as they don’t split up that would be our best solution.
        Grand Design’s customer service is what made our decision, we were ready to forget the whole idea due to everything we read about the poor quality of RV’s, but, crossed our fingers and took the plunge due to how responsive they are. Hoping it continues…

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