health savings account

Richard Bishopp rbishopp44 at gmail.com
Thu Oct 27 13:58:32 EDT 2011


Hi David.  I'm not an accountant either.

I have an HSA and next year will add an FSA. They are different types of
accounts.  The FSA, like you describe, is money up front that I will have
deducted from each pay check to pay back.  Use it or loose it.
The HSA can also be funded from my pay but in my case my employer
contributes a lump sum twice a year for me to use toward the
high deductible medical insurance.  So that money isn't there until they put
it there which last year was the end of January and then July. The plus with
the HSA is that any excess funds in that account stay there into the next
year and so on. The account earns interest and if enough I'll have to pay
taxes on the interest. Payroll deductions are pretax as with the FSA.  I'm
hoping the FSA money will be available early in January if I need it.
So my plan will be to create the FSA account and use that until it's gone
then switch over to the HSA money.

So you made your FSA a liability account only.  Nothing in the Assets ?  So
when you use the FSA for a medical bill you record a deduction from the FSA
liability and show the expense in the appropriate Expense account?  How does
a split from a pay check look ?  Must look like a deposit ?  I guess you can
tell I don't use the Liability accounts.  I have no outstanding debt except
a credit card that I pay down to zero frequently.

Rich...



On Thu, Oct 27, 2011 at 1:27 PM, David T. <sunfish62 at yahoo.com> wrote:

> RE: Equity vs. Asset
> I don't know; as I noted in the email, I am not an accountant. When I set
> up my FSAs, I spent a lot of time with help from others on this list, and
> that's where these accounts ended.
>
> RE: Liability or not
> My understanding of HSA/FSA accounts is that you the contributor agree at
> the start of the year that you are going to pay a certain dollar amount into
> the account, which you expect to use during that year for qualifying
> expenses. On each paycheck then, you are automatically charged for a portion
> of the amount you committed to pay. Unless you have some life-changing
> (defined by the IRS) event, you still have to pay this amount over the year.
> Even though it hasn't been taken yet, it will be. Therefore, you are liable
> for the amount you said you were going to pay. To me, that's a liability.
>
> Or, maybe you have some different kind of HSA than I ever have had. If so,
> then you're luckier than I am.
>
> David
>
> ------------------------------
> *From:* FireFly <fireflys_98 at yahoo.com>
> *To:* David T. <sunfish62 at yahoo.com>; Richard Bishopp <
> rbishopp44 at gmail.com>; suk wah bernstein <sukwahbernstein at gmail.com>
> *Cc:* "gnucash-user at gnucash.org" <gnucash-user at gnucash.org>
> *Sent:* Wednesday, October 26, 2011 10:41 PM
>
> *Subject:* Re: health savings account
>
> *From:* David T. <sunfish62 at yahoo.com>
> ***Subject:* Re: health savings account
>
> >That said, Health Savings Accounts in the US are a complicated thing, and
> different than US Dependent Care accounts.
> >Generally*, these accounts are considered a Liability, since you agree
> with some agency (the FSA provider) to contribute
> >a certain amount of money to the account over the year. The liability
> account balance
> >gets set at the beginning of the year to the dollar amount you say your
> >FSA will receive over the year.
>
> Why would it be an equity account vs an asset? I've always had my FSA setup
> as an Asset account, and I certainly plan to setup my HSA as an Asset since
> it really is (it's held at a bank and everything). The liabilty bit gets
> interesting, for an FSA it totally made sense (to me) since I could use it
> all Jan 2nd, and slowly repay it over the year, for an HSA (at least with my
> company) I can't, have to wait until I've got enough in my HSA before I can
> claim it.
>
> - James Duerr
>
> E-mail: FireFlys_98 at yahoo.com
> ---------------------
> Discover a lost art - play Marbles. May 2004
> www.marillion.com
> ------------------------------
> **
>
>
>


More information about the gnucash-user mailing list