HSA for Swiss health insurance

Finance, Taxes, Banking, Insurance and Retirement
1
Does anyone know if US citizens can open a Health Savings Account using their Swiss health insurance and a high deductible?

2
Hmmm, good question.

The AARO seems to think so: http://www.aaro.org/faqs and I don't see anything in the rules that would preclude it: http://www.irs.gov/publications/p969/ar02.html

The more difficult thing would probably be to get an account opened and have the administrator reimburse you for Swiss medical expenses.

3
Bump for more updated info.

Any US citizens resident in CH open an HSA in the US for their Swiss medical expenses?

4
I'm unsure why anyone would voluntarily pay for a US HSA as well as the Swiss health insurance that they are required to have.

5
The point of the US HSA would be to pay for the Swiss health insurance deductible with pre-tax dollars on the US tax-return.

6
I hadn't even thought of trying to set up an HSA, so thanks to this thread I'm now going to look into it.

An HSA might be an interesting option for me not just to reduce the impact of my Swiss healthcare costs but rather because as I am in the US so frequently. The primary reason I am interested in learning more is that the likelihood of needing treatment in the US grows as I grow older. Were I to need emergency treatment in the US my Swiss insurance would not cover it.

Moreover, an HSA, at least at first glance, is fairly attractive tax-wise. As the bulk of my tax liability is to Uncle Sam, an HSA, if really available to US citizens overseas, might be one of the few ways I could deflect some of that.

But more importantly, I do not have access to decent doctors here in Switzerland, thanks to where I live, thanks to the fact that I only have basic insurance. I had to go back to the US once already for diagnosis. Unlike in Switzerland, I can see top specialists in the US quickly, without a problem.

Well, there is that little problem that it will cost an arm and a leg and a left lung and probably several other organs. Hence why a US HSA is an interesting option.

I have only begun to read up in this, but it looks like determining if my Swiss insurance meets the qualifying definition will be a rather large hurdle. But worth looking into.

7
I've done this for a couple years with no problem. If you are on the hook for US taxes, it's a no-brainer. Let me explain why...

According to the specs, most Swiss health plans automatically qualify as a HDHP. In my case (with children), I simply have to have a deductible (franchise) above $2500 and out-of-pocket max below a certain threshold. The eligibility requirements are very simple.

I don't really use mine as a health savings plan. Rather, more like an additional IRA.

Benefits:

I can lower my taxable income by $6750 (for tax year 2016) just like a traditional IRA. Tax free contributions. Nice. Tax free growth. Nice. Any health expense reimbursement can be paid at any time . There is no time limit! This means I can keep all health expense receipts for years, and pay those expenses back to myself 100% tax free. That equates to triple tax savings. Nice. After age 65, I can pay myself back all funds contributed. The only caveat is that anything non-health related is of course taxed as a traditional IRA would be. But, there are no withdrawal penalties. The plan I use (healthsavings.com) allows investments into very low fee VanGuard funds. Nice. If for some reason I decide to pay myself back for expenses sooner than retirement age, I simply can use a debit card to take out cash. Otherwis, I can do an online transfer.

These things are great. In some ways (tax free withdrawals), they are even better than IRAs.

Hope this helps someone.

8
Update on HSA Process :

Opened a HSA for 2018 with our American Credit Union, where we are well known personally. Zero problems. Steps :

a) Self-certify that your Swiss plan meets IRS requirements (the key ones are the deductible greater than a minimum and the total out-of-pocket less than a maximum threshold). No proof requested.

b) Deposit funds into the newly-opened HSA account

c) Withdraw at your own discretion for time and purpose. The account manager (bank in this case) does not check that its for health care. You have to keep paperwork on hand in case of IRS Audit.

All the advantages mentioned by Alanbrito start accumulating at little or no opportunity cost.

9
I do believe that you cannot reimburse yourself for premiums paid.

Here are some examples of what is qualified and what is not:

http://www.hsacenter.com/what-is-an-...ical-expenses/

Dave

10
Very interesting information. Might anyone know please if the dividend or "dividend-equivalent" growth within the HSA would be taxable as income on Swiss taxes? Would the value of the HSA contribute to the total for calculating the wealth tax in Zürich? Thank you for any help.

11
The year-end value of the HSA is taxable for wealth and should be declared with assets, just like Roth IRA's.

If the dividend income is explicitly named as "Income" on the HSA year-end statement as such then technically it is also taxable as income and should be declared. However since stock capital gains are not taxable in Switzerland, growth in HSA balance per se is not taxable.

My guess is that US HSAs are an esoteric and rare feature for Swiss tax adjusters, and the amounts comparatively small, so not something of prime interest to them.