Confused about HSA Contribution Limits

[audreyh1]

We have two individual (separate) HSA accounts, and separate (individual) HSA qualified health insurance plans, and we are each over 55.

When I calculated our contribution limits for 2014, I used the family HSA limits of $6550, and added two 55+ contributions of $1000, for a total of $8550, and then divided by 2. So we each contributed $4275 to our HSA account in 2014.

After copious research I had gotten the strong impression that the family limit applied in our case, so I used that limit.

Well, the 2014 tax return didn’t figure it that way (computed by Turbotax). Two separate 8889 Forms used $4300 as the limit for excess contributions. This corresponds to the single limit of $3300 plus 55+ contribution of $1000.

So we each under contributed by $25 for 2014.

Maybe all these articles about couples assume that they always have a combined health insurance policy? When to apply “individual” and when to apply “family” limits is very confusing.

For 2015, family contribution limit is up $100 to $6,650, and individual is up $50 to $3,350. So I would normally increase our contribution each by $50 this year. But since we were behind by $25 in 2014, sounds like we can increase our contribution by $75 for 2015.

So is the moral of the story - family limits only apply for family insurance plans? If a couple has separate (individual) health insurance plans and separate HSA accounts, then the single limits apply?

 

[MichaelB]

So is the moral of the story - family limits only apply for family insurance plans? If a couple has separate (individual) health insurance plans and separate HSA accounts, then the single limits apply?

This is the way I have always approached it.

 

[Senator]

As a single person, over 55, I can contribute $4,350. A family can save $7,650. Not quite as much as 2x for an individual.

Another marriage penalty.

HSAcenter - Health Savings Accounts - Health Care and Savings for You and Your Family
HSA holders can choose to save up to $3,350 for an individual and $6,650 for a family (HSA holders 55 and older get to save an extra $1,000 which means $4,350 for an individual and $7,650 for a family)

If you have two individual HSAs, only the HSA that is assigned to you can be used for you.

For 2016, the family limits look like they go up just a bit for families to $7,750.

 

[ziggy29]

As a single person, over 55, I can contribute $4,350. A family can save $7,650. Not quite as much as 2x for an individual.

Another marriage penalty.

It's really not, for two reasons.

First, if *both* spouses are over 55, they both get the $1,000 catchup, bringing the max to $8,650. (For BOTH to get a catchup, though, each must have their own HSAs established in their name.)

Secondly, even after that you could say there's a "penalty" because a family can save $50 LESS than twice the single amount, but that's not built-in, these are rounded to the nearest $50 and adjusted for inflation. Sometimes, the family gets $50 *more* than twice the individual amount.

 

[audreyh1]

As a single person, over 55, I can contribute $4,350. A family can save $7,650. Not quite as much as 2x for an individual.

Another marriage penalty.

HSAcenter - Health Savings Accounts - Health Care and Savings for You and Your Family
HSA holders can choose to save up to $3,350 for an individual and $6,650 for a family (HSA holders 55 and older get to save an extra $1,000 which means $4,350 for an individual and $7,650 for a family)

If you have two individual HSAs, only the HSA that is assigned to you can be used for you.

For 2016, the family limits look like they go up just a bit for families to $7,750.

No - it's not a marriage penalty. It all depends on how your insurance plans and HSA accounts are set up.

This is where many people get it wrong!

It turns out that what counts is how the box is checked on the Form 8889 which covers HSAs.

For us, the "self-only" box was checked under "coverage under a high-deductible health plan (HDHP) during 2014" on each of two forms, and I believe that question is what determines whether the single or family limit applies.

So, if a couple has two individual HSA compatible insurance policies, and separate HSA accounts, then the single limit applies to each of them.

That is the answer. No article nor IRS point this out.

 

[audreyh1]

It's really not, for two reasons.

First, if *both* spouses are over 55, they both get the $1,000 catchup, bringing the max to $8,650. (For BOTH to get a catchup, though, each must have their own HSAs established in their name.)

Secondly, even after that you could say there's a "penalty" because a family can save $50 LESS than twice the single amount, but that's not built-in, these are rounded to the nearest $50 and adjusted for inflation. Sometimes, the family gets $50 *more* than twice the individual amount.

The family limit does not apply to a couple if you have separate (individual) HSA compatible health insurance plans. You use the single limit.

 

[audreyh1]

This is the way I have always approached it.

Yes - I found the magic check box on the 2014 Form 8889.

For us the "self-only" box was checked under "coverage under a high-deductible health plan (HDHP) during 2014" on each of the two forms, and I believe that is what determined that the single limit applied for each of us.

 

[MichaelB]

It's not any kind of penalty. Individuals, married couples and families all have HSA options. Because they are different amounts does not make the lesser options a penalty, they are all exemptions from income, all have tax benefits.

 

[audreyh1]

FWIW Here are the 2016 HSA limits, deductibles, etc.

IRS Issues 2016 HSA Contribution Limits