Any Health Savings Account experts here?

[ArmchairMillionaire23]

My apologies for the long post, but I'll try to include all the relevant details.
On April 19th of this year, I was forced into an early retirement for which I wasn't quite prepared. At that point, I had contributed $1,030.88 to my HSA for this year. ($64.43 per week)

It took 9 weeks for me to find a position with a new employer. I was hired on June 15th. I was not eligible for insurance until I had been employed for 90 days. I was then able to enroll in a new insurance plan on September 13th of this year. (90 days after my hire date)

My new plan has an individual deductible of $6,750 so it appears to definitely be a high-deductible health plan. (HDHP) Unfortunately, my new employer does not offer a Health Savings Account as part of my new insurance plan. I still have my existing HSA from my previous employer which is in a local bank.

After an enthralling hour researching the IRS website, I was able to find this:

To be an eligible individual and qualify for an HSA contribution, you must meet the following requirements.

You are covered under a high deductible health plan (HDHP), described later, on the first day of the month.
You have no other health coverage except what is permitted under Other health coverage, later.
You aren’t enrolled in Medicare.
You can’t be claimed as a dependent on someone else’s 2021 tax return.

According to the above, I should be able to contribute to my existing HSA for the rest of this year. I was trying to figure out if I could contribute the maximum amount allowed for this year ($3,600.00) or if I had to make allowances for the 9 weeks I was unemployed and the additional 90 days I had to wait until I was again covered by an eligible HDHP and then I found this:

Last-month rule. Under the last-month rule, if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers), you are considered an eligible individual for the entire year. You are treated as having the same HDHP coverage for the entire year as you had on the first day of the last month if you didn’t otherwise have coverage.

Testing period. If contributions were made to your HSA based on you being an eligible individual for the entire year under the last-month rule, you must remain an eligible individual during the testing period. For the last-month rule, the testing period begins with the last month of your tax year and ends on the last day of the 12th month following that month (for example, December 1, 2021, through December 31, 2022).
If you fail to remain an eligible individual during the testing period, for reasons other than death or becoming disabled, you will have to include in income the total contributions made to your HSA that wouldn’t have been made except for the last-month rule. You include this amount in your income in the year in which you fail to be an eligible individual. This amount is also subject to a 10% additional tax. The income and additional tax are calculated on Form 8889, Part III.

So, does this mean that I can make an after-tax contribution of $2,569.12 before the end of the year to bring my HSA contribution up to $3,600.00? I'm planning on "remaining an eligible individual" for all of 2023. I'm hoping I can take that $2,569.12 as a deduction on my 2022 tax return. I would also like to contribute the maximum amount for 2023 as well, even if it has to be after-tax contributions. I have asked my new employer about offering HSA accounts and they're looking into it for next year. I also talked to the local bank with which I have my existing HSA account but the tellers working that day did not have any knowledge of the IRS rules for HSA contributions so that's why I'm posting this here.

Any help and/or advice about this situation would be greatly appreciated.
Thank you.

[SecondCor521]

Yes. In fact the limit for this year is $3,650, so you could contribute directly to your HSA another $2,619.12 based on the last month rule.

You should probably confirm with your employer's insurance company first to verify that it is HSA eligible. Having a high enough deductible is a good start, and promising, but there are technical reasons why a high deductible health plan would not qualify as HSA eligible. They should be able to tell you for sure.

If your HSA is at a local bank, you should be able to deposit funds directly into your HSA, probably at a teller window. You have until the tax filing deadline (approximately 4/15/2023) to complete your 2022 contribution. HSAs work like IRAs in that regard.

And yes, you can take the additional contribution as a deduction on your tax return. It would go on Form 8889 line 2, or if you're using tax software it should be obvious where to put it.

Do not put the $1,030.88 in to your tax software or on Form 8889 anywhere. That amount should already have been deducted from your W-2 box 1 wages, so you get the tax benefit that way (via line 1 of your Form 1040).

Yes, you can contribute the maximum for 2023 as well, assuming you continue to work for this employer and their plan is HSA eligible as mentioned above. For 2023 for individual coverage it looks like the maximum contribution is $3,850.

(The HSA contribution limits are adjusted upward by an inflation-related amount.)

[audreyh1]

High deductible is not sufficient to meet the HSA eligibility requirements. You really need to speak with your medical insurance company directly to verify that your plan is HSA eligible. You have until you file your 2022 taxes or April 15 2023 to complete your contribution for 2022, so that gives you a little more time.

[Texas Proud]

As mentioned above I would ask the insurance company....


When I was employed I had a high deductible plan but it did not qualify as there was something else that disqualified it... I think it had to do with copays for Drs or something like that...


The insurance company said it did not qualify... there was a plan that did but it was not as good.

[cathy63]

Quote:

Originally Posted by ArmchairMillionaire23 ... My new plan has an individual deductible of $6,750 so it appears to definitely be a high-deductible health plan. (HDHP)

An HSA eligible HDHP is defined by more than just the deductible. It also has to have a max OOP of $7050, and it is only allowed to cover preventive care until the deductible is met. Does your employer say that their plan is HSA-eligible, even though they don't offer an HSA? They should be able to ask their contact at the insurance provider whether the plan qualifies.

Quote:

...According to the above, I should be able to contribute to my existing HSA for the rest of this year. I was trying to figure out if I could contribute the maximum amount allowed for this year ($3,600.00) or if I had to make allowances for the 9 weeks I was unemployed and the additional 90 days I had to wait until I was again covered by an eligible HDHP and then I found this: Last-month rule.... So, does this mean that I can make an after-tax contribution of $2,569.12 before the end of the year to bring my HSA contribution up to $3,600.00?...

Did you go without insurance, even COBRA, for the time you were not covered by your new employer? If you had COBRA under the old plan, there's no problem with contributing to your HSA through August.

If you had no insurance at all for that period, then you could rely on the last month rule and contribute up to $3650 for 2022 (not $3600), or $4650 if you are over age 55. However, if you do rely on the last month rule and find yourself unemployed in 2023, then you'll either have to buy a qualified plan (COBRA or ACA exchange) or deal with the tax consequences.

[ArmchairMillionaire23]

Quote:

Originally Posted by audreyh1 High deductible is not sufficient to meet the HSA eligibility requirements. You really need to speak with your medical insurance company directly to verify that your plan is HSA eligible. You have until you file your 2022 taxes or April 15 2023 to complete your contribution for 2022, so that gives you a little more time.

Quote:

Originally Posted by Texas Proud As mentioned above I would ask the insurance company.... When I was employed I had a high deductible plan but it did not qualify as there was something else that disqualified it... I think it had to do with copays for Drs or something like that... The insurance company said it did not qualify... there was a plan that did but it was not as good.

Quote:

Originally Posted by cathy63 An HSA eligible HDHP is defined by more than just the deductible. It also has to have a max OOP of $7050, and it is only allowed to cover preventive care until the deductible is met. Does your employer say that their plan is HSA-eligible, even though they don't offer an HSA? They should be able to ask their contact at the insurance provider whether the plan qualifies. Did you go without insurance, even COBRA, for the time you were not covered by your new employer? If you had COBRA under the old plan, there's no problem with contributing to your HSA through August. If you had no insurance at all for that period, then you could rely on the last month rule and contribute up to $3650 for 2022 (not $3600), or $4650 if you are over age 55. However, if you do rely on the last month rule and find yourself unemployed in 2023, then you'll either have to buy a qualified plan (COBRA or ACA exchange) or deal with the tax consequences.

Thanks for the above responses.

I was only covered by my previous employer's insurance through the end of April. I then went without insurance until September 13th.

I asked my new employer about HSA eligibility but the person in charge did not know. She said that other people were interested in HSA contributions and they were looking into it.

I then contacted my insurance company to ask if I was eligible to contribute to my existing HSA and their reply was:


Thank you for contacting us.

In response to your inquiry, our records show that there is no HSA information on our system. Please contact your employer to see if changes to your plan are permitted. All changes to your plan depend on your employer or plan sponsor.

We sincerely apologize for any inconvenience this may have caused you.

So that was helpful. My insurance card states that my OOP maximum (self) is $7,750.00 so maybe it does not qualify. I guess I could try to call Aetna next week to see if I can learn more.

[audreyh1]

Looks like your plan max OOP makes it HSA ineligible.

There is a minimum deductible, a max OOP, and a no copays rule. https://www.ebcflex.com/2022hsalimits/

[G-Man]

Quote:

Originally Posted by SecondCor521 Yes. In fact the limit for this year is $3,650, so you could contribute directly to your HSA another $2,619.12 based on the last month rule. You should probably confirm with your employer's insurance company first to verify that it is HSA eligible. Having a high enough deductible is a good start, and promising, but there are technical reasons why a high deductible health plan would not qualify as HSA eligible. They should be able to tell you for sure. If your HSA is at a local bank, you should be able to deposit funds directly into your HSA, probably at a teller window. You have until the tax filing deadline (approximately 4/15/2023) to complete your 2022 contribution. HSAs work like IRAs in that regard. And yes, you can take the additional contribution as a deduction on your tax return. It would go on Form 8889 line 2, or if you're using tax software it should be obvious where to put it. Do not put the $1,030.88 in to your tax software or on Form 8889 anywhere. That amount should already have been deducted from your W-2 box 1 wages, so you get the tax benefit that way (via line 1 of your Form 1040). Yes, you can contribute the maximum for 2023 as well, assuming you continue to work for this employer and their plan is HSA eligible as mentioned above. For 2023 for individual coverage it looks like the maximum contribution is $3,850. (The HSA contribution limits are adjusted upward by an inflation-related amount.)

I have a HSA with HSA Bank currently. The HSA max family contribution for 2022 for folks 55 or over is $8300. For 2022, I will have contributed about $5000 pre-tax contributions to my HSA through payroll deduction. I want to max out my HSA contribution for 2022. Do I just contact HSA bank and contribute $3300 of post-tax dollars to my HSA? If yes, how would I report the pre-tax and post-tax HSA contribution on my tax returns? I use the turbo-tax software.

[cathy63]

Quote:

Originally Posted by G-Man I have a HSA with HSA Bank currently. The HSA max family contribution for 2022 for folks 55 or over is $8300. For 2022, I will have contributed about $5000 pre-tax contributions to my HSA through payroll deduction. I want to max out my HSA contribution for 2022. Do I just contact HSA bank and contribute $3300 of post-tax dollars to my HSA? If yes, how would I report the pre-tax and post-tax HSA contribution on my tax returns? I use the turbo-tax software.

Yes, you can make a deposit to your HSA. The employee contributions will show up on your W-2 in box 12 with code W, so you don't have to do anything about those in TurboTax, just enter the info with all your other W-2 numbers.

If your employer also contributes to your HSA, then their contributions will be added to yours on the W-2 and they count towards the annual maximum, so make sure to take that into account when you calculate your additional contribution.

To enter your additional contribution as a deduction in TurboTax, go to Federal Taxes / Deductions & Credits / Medical / 1099-SA, HSA, MSA.

[G-Man]

Quote:

Originally Posted by cathy63 Yes, you can make a deposit to your HSA. The employee contributions will show up on your W-2 in box 12 with code W, so you don't have to do anything about those in TurboTax, just enter the info with all your other W-2 numbers. If your employer also contributes to your HSA, then their contributions will be added to yours on the W-2 and they count towards the annual maximum, so make sure to take that into account when you calculate your additional contribution. To enter your additional contribution as a deduction in TurboTax, go to Federal Taxes / Deductions & Credits / Medical / 1099-SA, HSA, MSA.

Thank you. My employer contribution is counted in the $5000 amount I posted earlier.

Ok. So to be clear, my $3300 post-tax HSA contribution will need to reported in the "Federal Taxes / Deductions & Credits / Medical / 1099-SA, HSA, MSA" section of TurboTax.

[G-Man]

Folks, I'm needing some help in reporting my HSA contribution for 2022 in TurboTax. The contribution consists of company and personal contribution. The total contribution for 2022 was $8,300.

On my W-2 form, in box 12b there is code of W with the amount of $4500. What is the correct way to enter this information in TurboTax to account for the $8300 HSA contribution?

[cathy63]

Quote:

Originally Posted by G-Man Folks, I'm needing some help in reporting my HSA contribution for 2022 in TurboTax. The contribution consists of company and personal contribution. The total contribution for 2022 was $8,300. On my W-2 form, in box 12b there is code of W with the amount of $4500. What is the correct way to enter this information in TurboTax to account for the $8300 HSA contribution?

Enter the $4500 on the W2 screen with all the other income info.

Then go to "Deductions & Credits / Medical / 1099-SA, HSA, MSA" to enter the rest of the info.

[G-Man]

Quote:

Originally Posted by cathy63 Enter the $4500 on the W2 screen with all the other income info. Then go to "Deductions & Credits / Medical / 1099-SA, HSA, MSA" to enter the rest of the info.

In the past, I entered the amount of my HSA contribution found on the W2 form (code W) in the Personal Income section called "1099-SA, HSA, MSA" in TurboTax as well. I guess I was double entering the HSA contribution amount.

However, the amount on the W2 form is a combination of employee and employer contributions. For example, here is the breakdown of the HSA contribution for 2022:

Code W on W2 Form:
$2000 contributed by employer
$2500 contributed by me via payroll deductions

Then in January 2023, I made an after-tax contribution of $3800 to my 2022 HSA to max out the $8300 limit.

Is there any special way to enter this information in TurboTax?

[G-Man]

Quote:

Originally Posted by G-Man In the past, I entered the amount of my HSA contribution found on the W2 form (code W) in the Personal Income section called "1099-SA, HSA, MSA" in TurboTax as well. I guess I was double entering the HSA contribution amount. However, the amount on the W2 form is a combination of employee and employer contributions. For example, here is the breakdown of the HSA contribution for 2022: Code W on W2 Form: $2000 contributed by employer $2500 contributed by me via payroll deductions Then in January 2023, I made an after-tax contribution of $3800 to my 2022 HSA to max out the $8300 limit. Is there any special way to enter this information in TurboTax?

Sorry for the confusion folks.

In the Personal Income section called "1099-SA, HSA, MSA" in TurboTax, I enter the information found on the 1099-SA Tax form for the distribution from my HSA account. Should I be doing that?

[cathy63]

Quote:

Originally Posted by G-Man In the past, I entered the amount of my HSA contribution found on the W2 form (code W) in the Personal Income section called "1099-SA, HSA, MSA" in TurboTax as well. I guess I was double entering the HSA contribution amount. However, the amount on the W2 form is a combination of employee and employer contributions. For example, here is the breakdown of the HSA contribution for 2022: Code W on W2 Form: $2000 contributed by employer $2500 contributed by me via payroll deductions Then in January 2023, I made an after-tax contribution of $3800 to my 2022 HSA to max out the $8300 limit. Is there any special way to enter this information in TurboTax?

It does not matter whether the contribution shown on your W2 was made by you or your employer, it's all the same for tax purposes. You enter it on the W2 screen only. If you entered it twice in prior years, then you were taking a double deduction and you might get a letter from the IRS and/or your state taxing authority at some point billing you for the tax you owe.

I'm surprised you would have done this though. When you go through the HSA screens, it shows you the amount it already has from your W2 and then on the same screen there's a box for "any contributions you personally made (not through your employer)". I think that's pretty clear, and I bet if you go look at your previous returns you probably did it correctly.

Also, you can't make an after-tax contribution of $3800. You will get a $3800 deduction from your income, so that will end up being untaxed money, i.e. you will get back any withholding that your employer kept from those funds.

[cathy63]

Quote:

Originally Posted by G-Man Sorry for the confusion folks. In the Personal Income section called "1099-SA, HSA, MSA" in TurboTax, I enter the information found on the 1099-SA Tax form for the distribution from my HSA account. Should I be doing that?

Yes, there's a question that says "Did you use your Health Savings Account to pay for anything in 2022?" If you got a 1099-SA, answer yes and enter the info from it on the following screens.

[G-Man]

Quote:

Originally Posted by cathy63 It does not matter whether the contribution shown on your W2 was made by you or your employer, it's all the same for tax purposes. You enter it on the W2 screen only. If you entered it twice in prior years, then you were taking a double deduction and you might get a letter from the IRS and/or your state taxing authority at some point billing you for the tax you owe. I'm surprised you would have done this though. When you go through the HSA screens, it shows you the amount it already has from your W2 and then on the same screen there's a box for "any contributions you personally made (not through your employer)". I think that's pretty clear, and I bet if you go look at your previous returns you probably did it correctly. Also, you can't make an after-tax contribution of $3800. You will get a $3800 deduction from your income, so that will end up being untaxed money, i.e. you will get back any withholding that your employer kept from those funds.

Thanks. I did it correctly in previous years. Sorry for the confusion.