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Started By
Message
Just switched from high deductible insurance. Can I still contribute to HSA?
Posted on 9/14/17 at 8:04 am
Posted on 9/14/17 at 8:04 am
Got better health insurance through my wife's employer and just dropped our prior high deductible plan with my employer. I was contributing monthly to an HSA. Do I have to stop contributing if I am not maxed out?
5
Posted on 9/14/17 at 8:19 am to fatboydave
I know the accounts are transferable to new policies, but I don't get the impression that your new policy is an HSA plan. So you want to keep contributing to it for what? Just to increase the balance for next time you enroll in an HSA plan? Just to have a tax advantaged account that generates interest? I don't think your new plan will have a mechanism for you to use your HSA, will it? I've never had a patient try that, but I don't think I would let them use the hsa card if the current, active plan is a ppo or hmo. I would try and verify the HSA, and it would pull up inactive.
Posted on 9/14/17 at 9:04 am to fatboydave
most likely you will not be able to contribute any for this year.
UPDATE. You can contribute some for this year but you have to do a calc to figure out how much based on the date you no longer has the HDHP.
UPDATE. You can contribute some for this year but you have to do a calc to figure out how much based on the date you no longer has the HDHP.
This post was edited on 9/14/17 at 11:05 am
Posted on 9/14/17 at 9:06 am to fatboydave
No you can't.
But you can use the money you already have.
But you can use the money you already have.
Posted on 9/14/17 at 11:04 am to castorinho
quote:
But you can use the money you already have.
Maybe not all of it, though. He will need to calculate how much he is allowed to contribute this year. Since he changed during the year, he cannot contribute the full amount to the HSA. If he has contributed more than what the prorated limit is, that money will have to be reported and taxes paid on it.
LINK
Posted on 9/14/17 at 1:43 pm to fatboydave
New policy is NOT an HDHP. So I would have 8 months of contributions already this year in the plan. It is not maxed out. i was going to max it if possible to shelter some more money for this year. I think i can spend my own money better than the government!
I'm reading the tax code and that shite is confusing
I'm reading the tax code and that shite is confusing
quote:
However, if you weren’t an eligible individual for the entire year or changed your coverage during the year, your contribution limit is the greater of: The limitation shown on the Line 3 Limitation Chart and Worksheetin the Instructions for Form 8889, Health Savings Accounts (HSAs), or The maximum annual HSA contribution based on your HDHP coverage (self-only or family) on the first day of the last month of your tax year.
This post was edited on 9/14/17 at 1:46 pm
Posted on 9/14/17 at 3:17 pm to fatboydave
The short answer is that you can't contribute any more to the HSA, but you can continue to use the money already in the account.
You can contribute to an FSA if your wife's employer offers that, not as good of a deal as you can't pile money up over years, but it does help.
You can contribute to an FSA if your wife's employer offers that, not as good of a deal as you can't pile money up over years, but it does help.
Posted on 9/15/17 at 12:35 am to fatboydave
Yes, it is. It's so confusing that the customer service rep at Optum Bank gave me two conflicting answers in the space of about fifteen minutes.
I'm moving away from my current HDHP in the first or second quarter of next year. I don't know yet what type of insurance I'll get after that. But my plan was to max out my HSA in January, just like I always do. But then I read something about the proration that's being discussed here. There's apparently an IRS penalty for excessive contributions, if the issue isn't cleared up. So I (unfortunately) called Optum for clarification.
The best I can figure, I might have as many as three different health plans next year. As long as the one I have on Dec. 1, 2018 is a qualifying HDHP, I apparently can fully fund my HSA in January and I won't have to break rocks at Club Fed... but I'm not 100% sure about that either. And the girl at Optum was like a little golf ball lost in the tall grass.
I'm moving away from my current HDHP in the first or second quarter of next year. I don't know yet what type of insurance I'll get after that. But my plan was to max out my HSA in January, just like I always do. But then I read something about the proration that's being discussed here. There's apparently an IRS penalty for excessive contributions, if the issue isn't cleared up. So I (unfortunately) called Optum for clarification.
The best I can figure, I might have as many as three different health plans next year. As long as the one I have on Dec. 1, 2018 is a qualifying HDHP, I apparently can fully fund my HSA in January and I won't have to break rocks at Club Fed... but I'm not 100% sure about that either. And the girl at Optum was like a little golf ball lost in the tall grass.
Posted on 9/15/17 at 4:39 pm to fatboydave
Hsa and flex spend accounts make my eyeballs bleed. Who has time to keep up with that shite?
Posted on 9/15/17 at 5:18 pm to sneakytiger
Triple tax advantages give me a woody though. 
The only real issue that I have with HSAs is that sharing ministry plans aren't considered qualified plans under current laws, and also, I think that the max annual HSA contribution should be set to the highest allowable annual deductible for HDHPs. What is that this year for a single person, about $6500? If that's it, then I think that's what people should be able to contribute to their HSAs... or at least whatever the deductible is for the plan that they have.
The only real issue that I have with HSAs is that sharing ministry plans aren't considered qualified plans under current laws, and also, I think that the max annual HSA contribution should be set to the highest allowable annual deductible for HDHPs. What is that this year for a single person, about $6500? If that's it, then I think that's what people should be able to contribute to their HSAs... or at least whatever the deductible is for the plan that they have.
Posted on 9/16/17 at 8:05 am to fatboydave
quote:
I'm reading the tax code and that shite is confusing
The table is essentially saying (in a round about way) you are allowed to prorate the maximum contribution that you or your family has qualified for. Your wife was already covered under a non qualified plan, so your maximum contribution would be $3,350. (If you are above 55 yrs old you can add $1,000) Next, figure out the number of months you were eligible - which is the number of months you were covered by a high deductible health plan. Finally, prorate that by the calendar year.
Example: (3350 x 8) / 12 = $2.233.33
This post was edited on 9/16/17 at 8:12 am
Posted on 9/16/17 at 8:13 am to sneakytiger
quote:
Hsa and flex spend accounts make my eyeballs bleed. Who has time to keep up with that shite?
Maybe FSAs, but HSAs are pretty simple and highly effective if you qualify.
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