HSA question

[audreyh1]

DW and I have a family medical insurance policy. It is HDHP, HSA eligible and has quite a high deductible. Even if the deductible were considered to be divided by two the dollar value would be high enough to meet the HDHP / HSA threshold.

However, it's a family policy. So the deductible includes both of us. Regardless of who incurs the medical expense whether it be a "procedure," an office visit, etc. it goes against the family deductible. This is a pre-ACA policy that we pay for and deduct our premium on our taxes every year.

I think we are only allowed to have a family HSA. Is that correct?

No, there is no family HSA. HSAs are individual accounts.. You can each have an HSA. You are subject to the family contribution limit since you have family insurance. But each of you can still make the 55+ catchup contribution. The only catch is the the second contribution will have to be made in a second account.

 

[candrew]

Claiming expenses from either account is fine. You can pay spouse's qualified medical expenses, no problem.

"Qualified medical expenses" being the key. Although Medicare and other health care coverage if you are 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap) are considered eligible expenses, only HSA funds from the Medicare age spouse (65 or older) may be used to pay those.

If the account beneficiary isn’t 65 or older (me), Medicare premiums for coverage of your spouse (who is 65 or older-my DW) generally aren’t qualified medical expenses.

DW became Medicare eligible in January. I have another 2 years to go. Until I become of Medicare age, her Medicare and Part D premiums can only be paid from her HSA account.

 

[audreyh1]

DW became Medicare eligible in January. I have another 2 years to go. Until I become of Medicare age, her Medicare and Part D premiums can only be paid from her HSA account.

Ah - I had forgotten that little detail. Good thing DH’s account should cover his Medicare premiums until I reach 65.

 

[Time2]

It has to be more than a HDHP... it has to be a HSA-eligible HDHP... not all HDHPs are HSA-eligible... in fact, it seems that more are NOT HSA-eligible than are.

My plan is eligible.






However, if it is a HSA eligible HDHP then you could do 2/12s in 2020.... they prorate it by month where you don't have a HSA-eligible plan for the entire year.[/QUOTE]


So I can put in $1,333 for 2019. 2 / 12 x $8,000=$1,333
I wonder if I should or can open an individual plan for my wife, since she is still on the HDHP. Or Since both her and my kids are still under the plan,
(we're just dropping me) can she still fund the Family Plan?
Do I need to switch names on the account or open a separate account?
It may be worth a little paperwork, she still has 5 years, before Medicare.

 

[mn54]

My plan is eligible.






However, if it is a HSA eligible HDHP then you could do 2/12s in 2020.... they prorate it by month where you don't have a HSA-eligible plan for the entire year.

So I can put in $1,333 for 2019. 2 / 12 x $8,000=$1,333
I wonder if I should or can open an individual plan for my wife, since she is still on the HDHP. Or Since both her and my kids are still under the plan,
(we're just dropping me) can she still fund the Family Plan?
Do I need to switch names on the account or open a separate account?
It may be worth a little paperwork, she still has 5 years, before Medicare.[/QUOTE]

your wife should open her own HSA. you could put in 2/12 of your individual amount and your wife could put in the individual max.

 

[blueskyk]

OK - all that was extremely helpful. Looks like our household has not actually made a boo-boo (yet).

We are on an HSA eligible HDHP family plan. Although we only have one HSA account, paying for either spouse out of it was okay (the fact it behaves as joint account in this regard was confusing). The family limit can only account for one catch-up contribution however and this is what we did. So, we left a little money on the table by not having two accounts (spouse catch up contribution).

This year, we both turn 65 (me in April, he in November). Since contributions will be limited to those months prior to Medicare, I'm thinking we will set up an account for DH which he can contribute 10/12 of the total (individual allowable amount + his catch up). I will contribute 3/12 of the total (individual allowable amount + my catch up) to our existing account.

 

[audreyh1]

My plan is eligible.






However, if it is a HSA eligible HDHP then you could do 2/12s in 2020.... they prorate it by month where you don't have a HSA-eligible plan for the entire year.


So I can put in $1,333 for 2019. 2 / 12 x $8,000=$1,333
I wonder if I should or can open an individual plan for my wife, since she is still on the HDHP. Or Since both her and my kids are still under the plan,
(we're just dropping me) can she still fund the Family Plan?
Do I need to switch names on the account or open a separate account?
It may be worth a little paperwork, she still has 5 years, before Medicare.

Your wife must have her own HSA. You can no longer contribute to yours once you reach Medicare eligibility, and she can’t contribute to yours either. She must contribute to her own. You don’t have a family HSA - it’s yours.

 

[blueskyk]

REWahoo - thanks so much for posting that IRS tutorial, that was great information. Add to that other posters questions and audreyh1’s clear explanations I think I finally get it!

 

[blueskyk]

Opps - one more question/clarification: when DH and I each have our own HSAs, qualified medical expenses may continue to be reimbursed from either account for either of us with the exception of Medicare premiums which must be paid specifically from the Medicare recipient account?

 

[audreyh1]

I think once an individual reaches 65 they can pay spouses and their own Medicare premiums from their HSA account.
https://www.kiplinger.com/article/i...-a-hsa-to-pay-medicare-premiums-tax-free.html

Just to be clear which Medicare premiums are eligible:

Once enrolled in Medicare, an individual can no longer contribute to a Health Savings Account (HSA). However, a Medicare beneficiary can use HSA distributions to pay for qualified medical expenses, such as premiums for Part B, a Medicare Advantage plan (Part C), a prescription drug plan (Part D), and long-term care insurance, and Medicare expenses, such as copayments and deductibles.

 

[blueskyk]

Ok - since I become a Medicare beneficiary first, Medicare premiums (not including Medigap premiums) can be paid from my HSA but not from DH HSA because he is not yet a Medicare beneficiary.

Then, when both DH and I are on Medicare, we would be able to pay Medicare premiums from either account.

Is it just me or does all this feel like one of those logic statement puzzles? Part of what has been difficult (for me) is the nomenclature of an individual account that allows joint activity. That is, the family (joint) limit may be deposited into the individual account with the exception of the non-account spouse's catch-up contribution. Also, the family (joint) qualified expenses may be disbursed from the individual account with the exception of specific items impacting the individual account holder (Medicare eligibility, etc.)

As an aside, I discovered that COBRA premiums are qualified medical expenses that may be reimbursed from an HSA.

 

[nvestysly]

DW and I have a family medical insurance policy. It is HDHP, HSA eligible and has quite a high deductible. Even if the deductible were considered to be divided by two the dollar value would be high enough to meet the HDHP / HSA threshold.

However, it's a family policy. So the deductible includes both of us. Regardless of who incurs the medical expense whether it be a "procedure," an office visit, etc. it goes against the family deductible. This is a pre-ACA policy that we pay for and deduct our premium on our taxes every year.

I think we are only allowed to have a family HSA. Is that correct?

Okay, I'm changing my thoughts a bit now that I've learned more of the proper (I think) terminology. Much thanks to the tutorial link REWahoo included earlier in this thread.

We have a family HDHP that is eligible for an HSA. We have been making family contributions to my HSA along with catch-up contributions since I am over 55.

1) DW is permitted to have her own HSA since our family plan is an HDHP. Correct?

2) Now that DW is over 55 she can also make a catch-up contribution if she establishes her own HSA. Correct?

3) Our HDHP is for a family - I'm primary, if that's the correct term, and DW is also on the same family plan. We are retired, been on the same HDHP for years so there is no first day of the month eligibility, no Medicare. Is there any reason why we cannot both have an HSA?

 

[blueskyk]

Okay, I'm changing my thoughts a bit now that I've learned more of the proper (I think) terminology. Much thanks to the tutorial link REWahoo included earlier in this thread.

We have a family HDHP that is eligible for an HSA. We have been making family contributions to my HSA along with catch-up contributions since I am over 55.

1) DW is permitted to have her own HSA since our family plan is an HDHP. Correct?

2) Now that DW is over 55 she can also make a catch-up contribution if she establishes her own HSA. Correct?

3) Our HDHP is for a family - I'm primary, if that's the correct term, and DW is also on the same family plan. We are retired, been on the same HDHP for years so there is no first day of the month eligibility, no Medicare. Is there any reason why we cannot both have an HSA?

I vote YES, YES, NO

 

[REWahoo]

I vote YES, YES, NO

^ +1

 

[Time2]

you might be confusing roth ira contributions with HSA contributions. you need earned income for roth, investment income for HSA with eligible insurance.

Well, yes and no, I just assumed the HSA had most of the same rules as the IRA.

 

[Born2Fish]

No, there is no family HSA. HSAs are individual accounts.. You can each have an HSA. You are subject to the family contribution limit since you have family insurance. But each of you can still make the 55+ catchup contribution. The only catch is the the second contribution will have to be made in a second account.

Audrey, I was not aware that me and DW could BOTH make the $1000 catchup contribution! (We are both over 55.)

If I start start doing contract (PT) work and get ACA coverage with a HDHP that is HSA eligible, can I split the HSA contributions between separate plans for me and DW so that BOTH of us can contribute the full catch up amount?

Is so, then could I contribute $3550 PLUS $1000 catchup into my HSA acct, and DW contributes 3550 PLUS $1000 catchup into DW's HSA acct?

 

[audreyh1]

For folks who are realizing their spouse can open an HSA, there is still time to make HSA contributions for 2019.

You can make a contribution to a new HSA for a given tax year if you open the account prior to April 15th the following calendar year. However, HSA funds may not be used to cover qualified medical expenses incurred prior to the account opening.

 

[RunningBum]

Well, yes and no, I just assumed the HSA had most of the same rules as the IRA.

There are a lot of differences in both contributions and withdrawals. I wouldn't make any such assumptions.

 

[nvestysly]

Going on a bit of a tangent here, but thought it was worth mentioning...

Fidelity now offers HSAs to individuals. Previously, Fidelity only offered HSAs through employer sponsored plans. The Fidelity web site indicates the account has all the typical features - check writing, bill pay, debit card, investments, zero fees (might depend on the $$ invested at Fido).

With a few button clicks I opened my account and funded it for 2020. Plan to do the same for DW later today.

 

[audreyh1]

Many of us here opened Fidelity HSAs as soon as they became available to the general public a little over a year ago.

 

[nvestysly]

Many of us here opened Fidelity HSAs as soon as they became available to the general public a little over a year ago.

Continuing the tangent... Apparently I'm late to the game. But I'll go with better late than never. I've learned so much from this forum and everyone who participates. The benefit from participating in this forum is immeasurable.

I did some searching on this forum recently and somehow missed the topic of Fidelity HSAs. I'm not the best at searching but I didn't find any thread titles on the matter.

It was probably a little over a year ago that I called Fidelity inquiring about individual (not employer sponsored) HSAs. The rep didn't say... "hey wait a month or two, they're just around the corner" and somehow I missed any discussion of it here on this forum. Is there a thread on the subject? Or are the comments mixed with other HSA threads like I've done on this thread? If Fidelity and similar brokerage houses are offering HSAs to anyone that is eligible the subject may merit its own thread. I'll be happy to do that if needed.

I'm certainly glad I found this thread and studied the information contained here. Another shout-out for the REWahoo post that led me to the detailed tutorial on who is and is-not eligible for HSAs. Fidelity confirmed both my wife and I are eligible for individual HSAs. Fidelity usually avoids anything that resembles tax advice but there were very willing to discuss nuances of HSAs.

 

[cathy63]

I did some searching on this forum recently and somehow missed the topic of Fidelity HSAs. I'm not the best at searching but I didn't find any thread titles on the matter.

It was probably a little over a year ago that I called Fidelity inquiring about individual (not employer sponsored) HSAs. The rep didn't say... "hey wait a month or two, they're just around the corner" and somehow I missed any discussion of it here on this forum. Is there a thread on the subject? Or are the comments mixed with other HSA threads like I've done on this thread? If Fidelity and similar brokerage houses are offering HSAs to anyone that is eligible the subject may merit its own thread. I'll be happy to do that if needed...

Here's the existing thread: Fidelity offers individual HSA accounts?