I have an HSA that I started when I had a qualified high deductible insurance plan. That plan is no longer available this year and now my out of pocket is too high to be HSA eligible. Can I still contribute money and claim in on my taxes to reduce my taxes for this year and pay my out of pocket expenses with tax free money. My insurance company could not answer the question and the HSA company says that the out of pocket for family can not exceed $13100 to be eligible. My max out of pocket is $14200. What are the penalties if I contribute and the IRS says it is not eligible? TIA for any help.

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Posted by Kramer26

St. George, LA

Member since Jan 2005

6404 posts

Posted on 3/28/17 at 10:04 am to jerryc436

(no message)

This post was edited on 3/28/17 at 9:19 pm

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Posted by baldona

Florida

Member since Feb 2016

20478 posts

Posted on 3/28/17 at 10:33 am to jerryc436

Your OP makes no sense. There are health care plans that are specifically called 'High deductible Health Plans' that are the only ones allowed to use HSAs. So generally, they are higher deductibles than PPOs, HMOs, and any other options.

Your insurance plan has to be eligible, if it's not in pretty sure the penalty is 10% plus your tax bracket in taxes.

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Posted by LSUFanHouston

NOLA

Member since Jul 2009

37106 posts

Posted on 3/28/17 at 10:36 am to jerryc436

You can't contribute to an HSA if you don't have an HDHP-eligible plan. The measurement is on a monthly basis.

Penalty would be having to recoup the contributions in income and an additional penalty of 10%.

However, once the money is in the HSA, you can use it for any eligible health expenses even if you no longer have an eligible plan at the time of distribution.

Does your company offer a medical FSA? that's an option although not nearly as nice as HSA.

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