Vita HSA Certificate & Health Care Plans Questions with Verified Answers,100% CORRECT

Vita HSA Certificate & Health Care Plans Questions with Verified Answers Leo Williams is single and 45 years old. Leo works as an IT manager and his Form W-2 shows wages of $47,250. Leo participated in his employer's self-only coverage High Deductible Health Plan (HDHP) all year. Leo does not have any other health coverage. Leo has had an HSA for two years. Leo's employer contributed $1,500 in 2017 to Leo's HSA. In 2017, Leo's Aunt contributed $2,000 to Leo's HSA. Leo is a U.S. citizen and has a valid Social Security number. 1. Is Leo an eligible individual for HSA purposes even though he did not make his own contributions? - CORRECT ANSWER Yes (Correct) Leo Williams is single and 45 years old. Leo works as an IT manager and his Form W-2 shows wages of $47,250. Leo participated in his employer's self-only coverage High Deductible Health Plan (HDHP) all year. Leo does not have any other health coverage. Leo has had an HSA for two years. Leo's employer contributed $1,500 in 2017 to Leo's HSA. In 2017, Leo's Aunt contributed $1,900 to Leo's HSA. Leo is a U.S. citizen and has a valid Social Security number. 2. What amount will Leo use to compute his HSA deduction on Form 1040, line 25? - CORRECT ANSWER $1900 (Correct) Leo Williams is single and 45 years old. Leo works as an IT manager and his Form W-2 shows wages of $47,250. Leo participated in his employer's self-only coverage High Deductible Health Plan (HDHP) all year. Leo does not have any other health coverage. Leo has had an HSA for two years. Leo's employer contributed $1,500 in 2017 to Leo's HSA. In 2017, Leo's Aunt contributed $2,000 to Leo's HSA. Leo is a U.S. citizen and has a valid Social Security number. 3. Employer contributions to Leo's HSA are reported on his Form W-2, box 12, code W. - CORRECT ANSWER True (Correct) Ed and Christine are married and will file a joint return. Ed is 47 years old, and Christine is 56 years old. Both were enrolled in self-only coverage High Deductible Health Plans (HDHPs) through their employers for the entire year of 2017. Ed and Christine each have an HSA. Both have contributed the maximum amounts to their HSAs in 2017. Ed and Christine are both U.S. citizens and have valid Social Security numbers. 4. The amount that can be contributed to an HSA depends on the following: - CORRECT ANSWER All of the above (Correct) Ed and Christine are married and will file a joint return. Ed is 47 years old, and Christine is 56 years old. Both were enrolled in self-only coverage High Deductible Health Plans (HDHPs) through their employers for the entire year of 2017. Ed and Christine each have an HSA. Both have contributed the maximum amounts to their HSAs in 2017. Ed and Christine are both U.S. citizens and have valid Social Security numbers. 5. Ed and Christine are both eligible to make catch-up contributions to their individual HSAs. - CORRECT ANSWER False (Correct) Judy Young is 58 years old. Judy is single, is not disabled, and has no dependents. In 2017, she had earnings from her job of $24,300. Judy has participated in her employer's self-only HDHP coverage since June 1, 2017 when she started a new job. Judy was an eligible individual all year. Judy asked the HSA trustee from her previous job to transfer the balance of $2,000 into the HSA at her new job. In 2017, Judy contributed $975 to her HSA. In 2017, Judy took funds from her HSA to pay the following expenses: Insulin $275 Doctor visit $185 Yoga classes $300 Prescription medicine $225 Premiums for COBRA coverage $425 Judy is a U.S. citizen and has a valid Social Security number. 6. The amount of Judy's HSA contribution reported on Form 8889, line 2 is $2,975. - CORRECT ANSWER False (Correct) Judy Young is 58 years old. Judy is single, is not disabled, and has no dependents. In 2017, she had earnings from her job of $24,300. Judy has participated in her employer's self-only HDHP coverage since June 1, 2017 when she started a new job. Judy was an eligible individual all year. Judy asked the HSA trustee from her previous job to transfer the balance of $2,000 into the HSA at her new job. In 2017, Judy contributed $975 to her HSA. In 2017, Judy took funds from her HSA to pay the following expenses: Insulin $275 Doctor visit $185 Yoga classes $300 Prescription medicine $225 Premiums for COBRA coverage $425 Judy is a U.S. citizen and has a valid Social Security number. 7. The amount of total distributions reported on Form 8889, line 14a is: - CORRECT ANSWER $1140 (Correct) Judy Young is 58 years old. Judy is single, is not disabled, and has no dependents. In 2017, she had earnings from her job of $24,300. Judy has participated in her employer's self-only HDHP coverage since June 1, 2017 when she started a new job. Judy was an eligible individual all year. Judy asked the HSA trustee from her previous job to transfer the balance of $2,000 into the HSA at her new job. In 2017, Judy contributed $975 to her HSA. In 2017, Judy took funds from her HSA to pay the following expenses: Insulin $275 Doctor visit $185 Yoga classes $300 Prescription medicine $225 Premiums for COBRA coverage $425 Judy is a U.S. citizen and has a valid Social Security number. 8. What is the amount reported on Form 8889, line 15? - CORRECT ANSWER $1100 (Correct) Carl, age 46, and Monica, age 42, are married and will file a joint return. They have two children, Adriane and Robert, whom they will claim as dependents on their joint return. Monica's cousin, Michael (age 29), came to live with them in July 2017. Michael's gross income was $4,300. Monica and Carl did not provide over one-half of Michael's support for the year but did pay $600 of Michael's medical bills in November 2017. Carl was enrolled all year in an HDHP with family coverage. Carl has had an HSA for four years. He has no other health insurance. In 2017, Carl made regular contributions to his HSA totaling $4,000. In 2017, Carl took $1,800 from his HSA to pay the following medical expenses: $300 to purchase Monica's eyeglasses (needed for medical reasons). $725 for long-term care insurance for Carl. $250 for over-the-counter eye medicine for their son, Robert (no prescription from doctor). $525 for Adriane's physical therapy sessions. Carl, Monica, Adriane, Robert, and cousin Michael are all U.S. citizens and have valid Social Security numbers. 9. The adjustment to income on Form 1040, line 25 for Carl's HSA deduction is: - CORRECT ANSWER $4000 (Correct) Carl, age 46, and Monica, age 42, are married and will file a joint return. They have two children, Adriane and Robert, whom they will claim as dependents on their joint return. Monica's cousin, Michael (age 29), came to live with them in July 2017. Michael's gross income was $4,300. Monica and Carl did not provide over one-half of Michael's support for the year but did pay $600 of Michael's medical bills in November 2017. Carl was enrolled all year in an HDHP with family coverage. Carl has had an HSA for four years. He has no other health insurance. In 2017, Carl made regular contributions to his HSA totaling $4,000. In 2017, Carl took $1,800 from his HSA to pay the following medical expenses: $300 to purchase Monica's eyeglasses (needed for medical reasons). $725 for long-term care insurance for Carl. $250 for over-the-counter eye medicine for their son, Robert (no prescription from doctor). $525 for Adriane's physical therapy sessions. Carl, Monica, Adriane, Robert, and cousin Michael are all U.S. citizens and have valid Social Security numbers. 10. Whose qualified medical expenses can Carl include for HSA purposes? - CORRECT ANSWER Adrianne and Robert, Carl (Correct) Carl, age 46, and Monica, age 42, are married and will file a joint return. They have two children, Adriane and Robert, whom they will claim as dependents on their joint return. Monica's cousin, Michael (age 29), came to live with them in July 2017. Michael's gross income was $4,300. Monica and Carl did not provide over one-half of Michael's support for the year but did pay $600 of Michael's medical bills in November 2017. Carl was enrolled all year in an HDHP with family coverage. Carl has had an HSA for four years. He has no other health insurance. In 2017, Carl made regular contributions to his HSA totaling $4,000. In 2017, Carl took $1,800 from his HSA to pay the following medical expenses: $300 to purchase Monica's eyeglasses (needed for medical reasons). $725 for long-term care insurance for Carl. $250 for over-the-counter eye medicine for their son, Robert (no prescription from doctor). $525 for Adriane's physical therapy sessions. Carl, Monica, Adriane, Robert, and cousin Michael are all U.S. citizens and have valid Social Security numbers. 11. On his Form 8889, Carl can include the $250 paid for Robert's over-the-counter eye medicine as a qualifying medical expense for HSA purposes. - CORRECT ANSWER False (Correct) 12. The amount of Peggy Walker's health savings account deduction reported on Form 1040, line 25 is $1,500? - CORRECT ANSWER False (Correct) 13. How much of Peggy's HSA distribution is taxable? - CORRECT ANSWER $175 (Correct) 14. The amount of unreimbursed qualified medical expenses reported on Form 8889, line 15 is $________. (Do not enter dollar signs, commas, periods, or decimal points in your answer.) - CORRECT ANSWER $2000 (Incorrect) $450 Incorrect 15. What is the amount of the additional 20% tax reported on Form 8889, line 17b? - CORRECT ANSWER $35 (Correct) Health Savings Account (HSA) - CORRECT ANSWER Health savings accounts (HSAs) were created under The Medicare Prescription Drug Improvement and Modernization Act of 2003. They are similar to flexible spending accounts (FSAs) in that each allows employees to use pretax dollars to pay for medical costs not covered by their health care plan. This includes expenses such as deductibles, co-pays and over the counter drugs when a doctor has written a prescription for the OTC item. FSAs require annual, use-it-or-lose-it elections, from which medical costs are reimbursed throughout the plan year; HSAs do not have the use-it-or-lose-it requirement. HSAs are often part of high-deductible plan packages and can be rolled over. Health Reimbursement Account (HRA) - CORRECT ANSWER An HRA is a fund established to reimburse employees for medical costs not covered by their health care plans. In contrast to HSAs, an HRA is funded solely by an employer, and the amount contributed can be rolled-over, and there are no government-specified out-of- pocket maximum limits. Preferred Provider Organization (PPO) - CORRECT ANSWER PPOs are groups of health care providers that contract with employers, insurance companies or third-party payers to provide medical care services at a reduced fee. Health Maintenance Organization (HMO) - CORRECT ANSWER An HMO is a prepaid health care system that provides routine, round-the-clock medical services and preventive medicine. Participants pay a nominal fee, and the employer pays a fixed annual fee. Point of Service (POS) - CORRECT ANSWER plans combine the benefits of an HMO with the benefits of a fee-for- service health care plan. Employees and covered family members can opt to use a provider network like an HMO or out-of-network provider like a fee-for-service plan. When they use the POS network of providers, they usually pay a co-payment for services. If they use non- POS providers, they pay a deductible, coinsurance, or the balance of the billed charge. Cafeteria plan - CORRECT ANSWER the employer gives employees benefit fund budgets and let the employees spend it on the benefits they prefer. Mandatory benefits (e.g., Social Security, workers' compensation) must be selected. Also known as flexible benefits plan. Consolidated Omnibus Budget Reconciliation Act (COBRA) - CORRECT ANSWER This law requires most private employers to offer to extend health benefits to separated employees and their families for a time, generally 18 months after separation but up to 36 months depending on the circumstances. Medicare - CORRECT ANSWER Medicare is a federal health insurance program offered to U.S. citizens age 65 and older and for certain disabled Americans. Medicare includes: Part A: Hospital insurance (free) Part B: Supplementary medical insurance (must pay a premium). Part C: Advantage plans such as a PPO or an HMO. Part D: Prescription drug coverage. Wellness programs - CORRECT ANSWER Wellness programs are prevention programs offered by employers. Wellness programs may include obesity management, stress management, senior health improvement and tobacco cessation programs. Flexible Spending Account (FSA) - CORRECT ANSWER An FSA is an account offered to employees to help accrue money to cover health care and dependent are expenses. Employees can contribute money from their pre-tax salary to the account and then use that money to receive reimbursement for out-of-pocket health care Fee-for-Service Health Care Plan (Indemnity Health Care Plan) - CORRECT ANSWER In fee-for-service plans, a premium is paid to a private insurance carrier to provide a specific package of health benefits. The plan only finances; it does not deliver the health care services. Some employers may choose to self-fund a fee-for-service plan. In that case, the employer, as opposed to an insurance company, assumes responsibility for payment of physician or hospital services.