Page 33 - Empowered Learning for Dyslexic Children Benefits Guide 2022-2023

Frequently Asked Questions

HSA investment options Retirement, Medicare and HSAs
Q: Are my investment accounts part of my HSA? Q: My spouse and I turn 65 this year and will sign
up for Medicare. Can we still use the money in
A: While the basic investment account and the
brokerage investment account are in the Charles our HSA?
Schwab Trust Company’s custody, they are not A: Yes. Although you can’t contribute to an HSA
part of your CareFirst HSA. CareFirst does not pay after enrolling in Medicare, you can keep the
interest on the investment accounts. account and use HSA funds tax-free for eligible
medical expenses. HSA dollars can be used for
Q: How can I direct future contributions into my a broad range of medical expenses, including
Basic Investment Account?
premiums for Medicare Parts A, B and D
A: You can send future HSA contributions to mutual (prescription drugs) and Medicare Advantage plan
fund investments at carefirst.com/myaccount. premiums. You may also pay qualified long-term
You’ll find various options to control or manage care premiums with these funds. HSA funds cannot
the flow of contributions to the mutual fund(s) you be used tax-free to pay Medicare Supplement
choose. Generally, you can elect to have all or part or Medigap premiums. Remember, you will
of your future contributions flow directly into select owe taxes on any withdrawals for non-eligible
investments in your account. If your base balance medical expenses.
falls below $1,000, your future contributions
will be used to rebuild your base balance. Any Q: I am turning 65 soon and will enroll in
later contributions will be invested based on Medicare at that time. How much can I contribute
your elections. to my HSA for the year?
A: Once you (the account holder) are enrolled in
Q: How do I request a withdrawal when I have an Medicare, you must pro-rate the contributions for
active investment account?
the year that coverage begins. Medicare coverage
A: Account withdrawals are always paid from your starts on the first day of the month in which you
base balance. If there are not enough funds in your turn 65. Take the allowed contribution for the year
base balance to pay a claim, the claim will stay (including any catch-up contributions) and divide
pending for 12 months or until more funds are by 12. For example, if you turn 65 in April, you
available. Funds are not automatically withdrawn are eligible to contribute from January to March.
from an active investment account. To pay for Multiply the monthly amount by three to get the
pending claims, funds must be paid from new maximum allowed contribution amount.
contributions or by transferring funds from your
investment account to your base balance. Q: Do I have to make all contributions before my
65th birthday?
Withdrawals will be taken proportionally (pro rata) A: No. Contributions can be made until the tax filing
from the mutual funds you have invested if you deadline, typically April 15.
have selected the proportional transfer option
(the only option for the basic investment account).
Otherwise, Schwab brokerage accounts will move
the money (cash to transfer) into a self-directed
account. You will need to select the fund(s) and
amount(s) you want to sell to fund your withdrawal.

11 ■ Health Savings Account (HSA) Member Guide