HSA Family $6,750 limit questions

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Topic Author
Joel
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HSA Family $6,750 limit questions

Post by Joel »

My wife has access to a HDHP w/ HSA.

For just her, the plan costs $0 and they contribute $600 to the account.
For her + me, the plan still costs $0 and they contribute $1,200 to the account.
No children.

With that said, we want to sign up for her + me through her employer, in order to get the extra $600 contribution from her employer.

With that said, my employer does not offer a HDHP w/ HSA. I'm able to get a decent Kaiser HMO medical plan for $24 per year through my employer. If I do not purchase insurance through my employer, my wife's employer charges a $125 per month spousal surcharge.

As a result, my wife has a HDHP w/ HSA for her and me, while I have an HMO covering just me.

Regarding the HSA, are we eligible for contribute $3,350 for my wife? Or $6,750 for the family?

My gut tells me we are probably limited to $3,350 for my wife, but I can't seem to find another saying we can't contribute $6,750.
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
michaeljc70
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Re: HSA Family $6,750 limit questions

Post by michaeljc70 »

Joel wrote:My wife has access to a HDHP w/ HSA.

For just her, the plan costs $0 and they contribute $600 to the account.
For her + me, the plan still costs $0 and they contribute $1,200 to the account.
No children.

With that said, we want to sign up for her + me through her employer, in order to get the extra $600 contribution from her employer.

With that said, my employer does not offer a HDHP w/ HSA. I'm able to get a decent Kaiser HMO medical plan for $24 per year through my employer. If I do not purchase insurance through my employer, my wife's employer charges a $125 per month spousal surcharge.

As a result, my wife has a HDHP w/ HSA for her and me, while I have an HMO covering just me.

Regarding the HSA, are we eligible for contribute $3,350 for my wife? Or $6,750 for the family?

My gut tells me we are probably limited to $3,350 for my wife, but I can't seem to find another saying we can't contribute $6,750.
If you have an individual HSA plan you can only contribute the individual limit.
GTBuzz
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Re: HSA Family $6,750 limit questions

Post by GTBuzz »

Your wife can actually contribute the full $6,750 to her HSA. Here's a good post from TheFinanceBuff with several examples in the post as well as the comments:

https://thefinancebuff.com/hsa-contribu ... anges.html
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Don Christy
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Re: HSA Family $6,750 limit questions

Post by Don Christy »

Caveat... I'm not an expert and you should not rely on this...

My understanding is that if you are covered under your HMO you cannot contribute to an HSA. Also, it would surprise me if the plans would allow for dual coverage.

Do I understand you that you are in both your HMO and her HDHP?
Don
“Speak only if it improves upon the silence." Mahatma Gandhi
Topic Author
Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

GTBuzz wrote:Your wife can actually contribute the full $6,750 to her HSA. Here's a good post from TheFinanceBuff with several examples in the post as well as the comments:

https://thefinancebuff.com/hsa-contribu ... anges.html
That article would seem to indicate that the wife can only contribute $3,350 (individual limit) to the plan she has as I am covered by a non-HDHP plan.

I am in my HMO and her HDHP, while she is just covered by her HDHP. Her HSA is a family plan though, as it covers both of us.
Last edited by Joel on Thu Oct 27, 2016 12:20 pm, edited 1 time in total.
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
michaeljc70
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Re: HSA Family $6,750 limit questions

Post by michaeljc70 »

My HSA provider, Optum, has this on their website:

"Individual vs. family contribution limits
Your contribution limits are generally determined by the type of qualifying high-deductible health plan you have — individual or family coverage. The amount you or anyone else can contribute to your HSA depends on the type of high-deductible health plan (HDHP) you have, your age, the date you become an eligible individual, and the date you cease to be an eligible individual are also considered. If you and your spouse are covered by different health plans, consult a tax advisor regarding your personal situation."

I am not sure I would trust a blog for my tax information.
michaeljc70
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Re: HSA Family $6,750 limit questions

Post by michaeljc70 »

michaeljc70 wrote:My HSA provider, Optum, has this on their website:

"Individual vs. family contribution limits
Your contribution limits are generally determined by the type of qualifying high-deductible health plan you have — individual or family coverage. The amount you or anyone else can contribute to your HSA depends on the type of high-deductible health plan (HDHP) you have, your age, the date you become an eligible individual, and the date you cease to be an eligible individual are also considered. If you and your spouse are covered by different health plans, consult a tax advisor regarding your personal situation."

I am not sure I would trust a blog for my tax information.

From IRS Publication 969:

"Limit on Contributions
The amount you or any other person can contribute to
your HSA depends on the type of HDHP coverage you
have, your age, the date you become an eligible individual,
and the date you cease to be an eligible individual.
For 2015, if you have self-only HDHP coverage, you can
Page 4 Publication 969 (2015)
Page 5 of 21 Fileid: … tions/P969/2015/A/XML/Cycle03/source 17:08 - 13-Jan-2016
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
contribute up to $3,350. If you have family HDHP coverage,
you can contribute up to $6,650."

It doesn't really make sense to be able to contribute double when you both don't have an HSA.
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Don Christy
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Re: HSA Family $6,750 limit questions

Post by Don Christy »

GTBuzz wrote:Your wife can actually contribute the full $6,750 to her HSA. Here's a good post from TheFinanceBuff with several examples in the post as well as the comments:

https://thefinancebuff.com/hsa-contribu ... anges.html
Note to mods: sorry I reported this message accidentally. Didn't have my readers on and thought I was replying... 8-)

GTBuzz: not if OP is covered under his HMO.

EDIT: I retract my statements above... while OP is not an eligible individual to have an HSA, it's not clear to me whether his spouse, who has family coverage in HDHP, is limited to the individual limit or the family limit.

Hopefully someone with more knowledge can clarify or direct to authoritative source.
Last edited by Don Christy on Thu Oct 27, 2016 12:39 pm, edited 1 time in total.
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Topic Author
Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

I think my understand is as follows:

She can contribute $3,350 for the individual limit. We are not eligible for the family limit as I am covered by my HMO.

However, since I can be covered by my HMO and her HDHP, it makes sense to do that in order to get the additional $600 contribution by her employer. As a result, her employer will contribute $1,200, and we can only actually contribute $2,150.

Agree?
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
GTBuzz
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Re: HSA Family $6,750 limit questions

Post by GTBuzz »

OP only asked about the contribution limit. The only thing that determines OP's wife's contribution limit is whether or not her HDHP is self-only or family (and her age, if making a catch-up contribution). In this case, it's family coverage so the higher limit applies.

Whether or not OP can pay for his expenses out of her HSA funds is what I'm not sure of, as he is covered by an HMO.
niceguy7376
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Re: HSA Family $6,750 limit questions

Post by niceguy7376 »

Joel wrote: For just her, the plan costs $0 and they contribute $600 to the account.
For her + me, the plan still costs $0 and they contribute $1,200 to the account.

I'm able to get a decent Kaiser HMO medical plan for $24 per year through my employer.
Wow, what a lucky situation you two are in. Zero plan costs or $24 per year?

I would love to get employed by either of your employers for those premiums.
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Artsdoctor
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Re: HSA Family $6,750 limit questions

Post by Artsdoctor »

Joel wrote:My wife has access to a HDHP w/ HSA.

For just her, the plan costs $0 and they contribute $600 to the account.
For her + me, the plan still costs $0 and they contribute $1,200 to the account.
No children.

With that said, we want to sign up for her + me through her employer, in order to get the extra $600 contribution from her employer.

With that said, my employer does not offer a HDHP w/ HSA. I'm able to get a decent Kaiser HMO medical plan for $24 per year through my employer. If I do not purchase insurance through my employer, my wife's employer charges a $125 per month spousal surcharge.

As a result, my wife has a HDHP w/ HSA for her and me, while I have an HMO covering just me.

Regarding the HSA, are we eligible for contribute $3,350 for my wife? Or $6,750 for the family?

My gut tells me we are probably limited to $3,350 for my wife, but I can't seem to find another saying we can't contribute $6,750.
So just to clarify: If you are covered under YOUR employer's plan and it is not a HDHP plan, you cannot contribute to an HSA. That's very clear. If you are covered under your WIFE'S plan, you will be eligible to contribute. You can't have both. Publication 969 regarding HSAs is very clear on this so you can check that out; it's detailed under "Other health coverage."
Topic Author
Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

Artsdoctor wrote:So just to clarify: If you are covered under YOUR employer's plan and it is not a HDHP plan, you cannot contribute to an HSA. That's very clear. If you are covered under your WIFE'S plan, you will be eligible to contribute. You can't have both. Publication 969 regarding HSAs is very clear on this so you can check that out; it's detailed under "Other health coverage."
I'm not contributing to an HSA.

What I'm trying to determine is whether my wife can contribute $3,350 or $6,750.
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
Topic Author
Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

niceguy7376 wrote:
Joel wrote: For just her, the plan costs $0 and they contribute $600 to the account.
For her + me, the plan still costs $0 and they contribute $1,200 to the account.

I'm able to get a decent Kaiser HMO medical plan for $24 per year through my employer.
Wow, what a lucky situation you two are in. Zero plan costs or $24 per year?

I would love to get employed by either of your employers for those premiums.
Yes, we are very fortunate. She works for a major vision insurance company, and my employer just offers great benefits (there's a vitality program that reduces the insurance from $42 per month down to $2 per month.
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
Topic Author
Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

GTBuzz wrote:OP only asked about the contribution limit. The only thing that determines OP's wife's contribution limit is whether or not her HDHP is self-only or family (and her age, if making a catch-up contribution). In this case, it's family coverage so the higher limit applies.

Whether or not OP can pay for his expenses out of her HSA funds is what I'm not sure of, as he is covered by an HMO.
See that's where my confusion lies.

Technically, she's enrolled in a family plan, so I would think she is entitled to the family coverage. However, since I have an HMO, I'm also wondering if that limits her to the individual limit (even though the plan is family coverage).
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
Topic Author
Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

Up until this year, we both have very minimal health expenses (hence the preference for HSAs). However, we are planning to start trying for our first child early next year. Which has me wondering if the additional $600 employer contribution is actually worth any increases in the deductibles under her plan. It very well may not be. I will have to look closely at that once I get access to her open enrollment options.
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
michaeljc70
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Re: HSA Family $6,750 limit questions

Post by michaeljc70 »

Joel wrote:
GTBuzz wrote:OP only asked about the contribution limit. The only thing that determines OP's wife's contribution limit is whether or not her HDHP is self-only or family (and her age, if making a catch-up contribution). In this case, it's family coverage so the higher limit applies.

Whether or not OP can pay for his expenses out of her HSA funds is what I'm not sure of, as he is covered by an HMO.
See that's where my confusion lies.

Technically, she's enrolled in a family plan, so I would think she is entitled to the family coverage. However, since I have an HMO, I'm also wondering if that limits her to the individual limit (even though the plan is family coverage).
It doesn't matter. The law specifically prohibits you from making a contribution because you have other coverage. HSAs are for high deductible plans, not HMOs.

IRS:

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

"
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Don Christy
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Re: HSA Family $6,750 limit questions

Post by Don Christy »

Do a little more research for yourself, but I think all the following are true:
- HSAs are always individual
- contribution limits are tied to the type of coverage, individual or family
- if your wife has family coverage in an eligible HDHP and isn't covered under other insurance, she is subject to the family limit.
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Artsdoctor
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Re: HSA Family $6,750 limit questions

Post by Artsdoctor »

Ok. This is how it works.

Your wife will have her HDHP. She is an eligible individual. If there's no one else on her plan, it is an individual plan.

If you will be on her plan, you will be an eligible individual as well. Because there are two people on the plan, it is considered a family plan.

The definitions of individual plan and family plan are spelled out in Publication 969. You cannot be eligible to contribute the family plan maximum if there is only one person on the plan.

"Self-only HDHP coverage is an HDHP covering only an eligible individual. Family HDHP coverage is an HDHP covering an eligible individual and at least one other individual (whether or not that individual is an eligible individual)." Meaning, will her plan cover you or not? If her plan does NOT cover you, it would appear that it cannot be considered a family HDHP.

Then, if your wife has an individual plan, she and/or her employer can contribute up to $3,350 for 2016.

That money can be spent on qualified medical expenses and/or invested. It can be reimbursed retroactively.

Qualified expenses include YOUR medical expenses incurred after she sets up her plan because you are her spouse. Even though you might have a Kaiser HMO, any expenses incurred by you, can be reimbursed by her through her plan.

https://www.irs.gov/publications/p969/a ... 1000204039
Last edited by Artsdoctor on Thu Oct 27, 2016 12:54 pm, edited 1 time in total.
Topic Author
Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

From Page 3 of Publication 969, "To be an eligible individual and qualify for an HSA, you must meet the following requirements.
1) You must be covered under a high deductible health plan (HDHP), described later, on the first day of the month.
2) You have no other health coverage except what is permitted under Other health coverage, later.
3) You are not enrolled in Medicare.
4) You cannot be claimed as a dependent on someone else's 2015 tax return."

From Page 3 of Publication 969, "Family HDHP coverage is an HDHP covering an eligible individual and at least one other individual (whether or not that individual is an eligible individual)."

From Page 4 of Publication 969, "You (and your spouse, if you have family coverage) generally cannot have any other health coverage that is not an HDHP. However, you can still be an eligible individual even if your spouse has non-HDHP coverage provided you are not covered by that plan."

From Page 5 of Publication 969, "For 2016, if you have self-only HDHP coverage, you can contribute up to $3,350. If you have family HDHP coverage, you can contribute up to $6,650."

From Page 6 of Publication 969, "The rules for married people apply only if both spouses are eligible individuals."

Having read the entire HSA section in Publication 969, its still not clear to me.
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
Topic Author
Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

Yes - My wife is an eligible individual.
Yes - Her HDHP is for family coverage (both of us)

Therefore, wife can contribute the family coverage limit to her HSA.

It does not appear that I have to be an eligible individual for her to have a family plan entitled her to the family coverage limit.
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
GTBuzz
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Re: HSA Family $6,750 limit questions

Post by GTBuzz »

michaeljc70 wrote:
Joel wrote:
GTBuzz wrote:OP only asked about the contribution limit. The only thing that determines OP's wife's contribution limit is whether or not her HDHP is self-only or family (and her age, if making a catch-up contribution). In this case, it's family coverage so the higher limit applies.

Whether or not OP can pay for his expenses out of her HSA funds is what I'm not sure of, as he is covered by an HMO.
See that's where my confusion lies.

Technically, she's enrolled in a family plan, so I would think she is entitled to the family coverage. However, since I have an HMO, I'm also wondering if that limits her to the individual limit (even though the plan is family coverage).
It doesn't matter. The law specifically prohibits you from making a contribution because you have other coverage. HSAs are for high deductible plans, not HMOs.

IRS:

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

"
But OP is not making a contribution. His wife is, and she does not have other health coverage. I think technically her $6,750 family coverage limit can be shared between OP and his wife, but I think it's more straightforward if his wife puts the entire contribution in her HSA.

Comment #16 on TheFinanceBuff link I posted is me. I added my fiancée to my HDHP coverage in November 2015, and maintained this family coverage through now (we are getting married in December of this year), all while she has maintained her HMO self-only coverage through her work. I contributed the full family limit for 2015 (last month rule) and am also doing so for 2016. Of course, do your own research and consult a tax expert if necessary (I am not one), but I researched the hell out of this at the time and am confident that what I'm doing--and your wife contributing the family limit to her HSA--is allowed.
michaeljc70
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Re: HSA Family $6,750 limit questions

Post by michaeljc70 »

Joel wrote:From Page 3 of Publication 969, "To be an eligible individual and qualify for an HSA, you must meet the following requirements.
1) You must be covered under a high deductible health plan (HDHP), described later, on the first day of the month.
2) You have no other health coverage except what is permitted under Other health coverage, later.
3) You are not enrolled in Medicare.
4) You cannot be claimed as a dependent on someone else's 2015 tax return."

From Page 3 of Publication 969, "Family HDHP coverage is an HDHP covering an eligible individual and at least one other individual (whether or not that individual is an eligible individual)."

From Page 4 of Publication 969, "You (and your spouse, if you have family coverage) generally cannot have any other health coverage that is not an HDHP. However, you can still be an eligible individual even if your spouse has non-HDHP coverage provided you are not covered by that plan."

From Page 5 of Publication 969, "For 2016, if you have self-only HDHP coverage, you can contribute up to $3,350. If you have family HDHP coverage, you can contribute up to $6,650."

From Page 6 of Publication 969, "The rules for married people apply only if both spouses are eligible individuals."

Having read the entire HSA section in Publication 969, its still not clear to me.
Isn't the only reason she is getting the family HSA is because it costs nothing? Clearly you will be using your HMO because it doesn't have a high deductibles, right? Are you sure she can even enroll in the family HSA??
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Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

michaeljc70 wrote:Isn't the only reason she is getting the family HSA is because it costs nothing? Clearly you will be using your HMO because it doesn't have a high deductibles, right? Are you sure she can even enroll in the family HSA??
I haven't found anything to say that I am not allowed to be covered by my HMO and her HDHP. Are you saying that is somehow not allowed?
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
michaeljc70
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Re: HSA Family $6,750 limit questions

Post by michaeljc70 »

From Keybank (HSA issuer):

"Am I eligible for an HSA even if I have other insurance that pays medical bills?
You are only allowed to have auto, dental, vision, disability and long-term care insurance at the same time as an HDHP. You may also have coverage for a specific disease or illness as long as it pays a specific dollar amount when the policy is triggered. Wellness programs offered by your employer are also permitted if they do not pay significant medical benefits."


I don't think your wife can even get a family HSA. Did she ask HR?
Topic Author
Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

GTBuzz wrote:But OP is not making a contribution. His wife is, and she does not have other health coverage. I think technically her $6,750 family coverage limit can be shared between OP and his wife, but I think it's more straightforward if his wife puts the entire contribution in her HSA.

Comment #16 on TheFinanceBuff link I posted is me. I added my fiancée to my HDHP coverage in November 2015, and maintained this family coverage through now (we are getting married in December of this year), all while she has maintained her HMO self-only coverage through her work. I contributed the full family limit for 2015 (last month rule) and am also doing so for 2016. Of course, do your own research and consult a tax expert if necessary (I am not one), but I researched the hell out of this at the time and am confident that what I'm doing--and your wife contributing the family limit to her HSA--is allowed.
That's the same determination I made in January when I changed employers (no longer having access to my own HSA). However, with open enrollment for FY17 happening, I was researching again as I discovered my employer will match $48 to an FSA if I created one. Of course, that match is minimal and I don't plan to go there, but that's what made me start thinking about this topic again.
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
Topic Author
Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

michaeljc70 wrote:From Keybank (HSA issuer):

"Am I eligible for an HSA even if I have other insurance that pays medical bills?
You are only allowed to have auto, dental, vision, disability and long-term care insurance at the same time as an HDHP. You may also have coverage for a specific disease or illness as long as it pays a specific dollar amount when the policy is triggered. Wellness programs offered by your employer are also permitted if they do not pay significant medical benefits."

I don't think your wife can even get a family HSA. Did she ask HR?
My wife does NOT have other medical insurance.
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
Spirit Rider
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Re: HSA Family $6,750 limit questions

Post by Spirit Rider »

To further clarify there are actually three issues here.

HSA contribution limit: This is based solely on the type of plan. A family HDHP plan, a family HSA contribution limit.

HSA covered individual: The plan holder and if a family plan, spouse and dependents.

HSA eligible individual: You are an eligible individual if you are a covered under a HDHP, you have no other health coverage (including Medicare) and you are not a dependent.

So the answers if your wife gets the family plan are:
  1. Her contribution limit is the family plan limit ($6,750) - employer family contribution ($1,200) = $5,550.
  2. You are a covered individual and her HSA account may be used for any of her or your out-of-pocket qualified medical expenses including deductible, co-pays, other unreimbursed medical expenses, vision/dental care, etc...
  3. You are not an eligible individual and may not make HSA contributions to you own account.
Bottom line, you have hit the jackpot.
Topic Author
Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

Spirit Rider wrote:To further clarify there are actually three issues here.

HSA contribution limit: This is based solely on the type of plan. A family HDHP plan, a family HSA contribution limit.

HSA covered individual: The plan holder and if a family plan, spouse and dependents.

HSA eligible individual: You are an eligible individual if you are a covered under a HDHP, you have no other health coverage (including Medicare) and you are not a dependent.

So the answers if your wife gets the family plan are:
  1. Her contribution limit is the family plan limit ($6,750) - employer family contribution ($1,200) = $5,550.
  2. You are a covered individual and her HSA account may be used for any of her or your out-of-pocket qualified medical expenses including deductible, co-pays, other unreimbursed medical expenses, vision/dental care, etc...
  3. You are not an eligible individual and may not make HSA contributions to you own account.
Bottom line, you have hit the jackpot.
That was my original interpretation as well.
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
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Artsdoctor
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Re: HSA Family $6,750 limit questions

Post by Artsdoctor »

GT Buzz,

Yes, if you added another individual to your plan, then it may very well be considered a family plan. Presumably, someone is paying her premiums. So it would appear that she is covered under two plans (yours and hers). This can have unintended consequences that can be unpredictable: one insurance company will claim that the other is the primary (and vice versa) which can make payments to providers difficult.
an_asker
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Re: HSA Family $6,750 limit questions

Post by an_asker »

Spirit Rider wrote:[...]
Bottom line, you have hit the jackpot.
Are you sure? To me, it appears that OP is paying an additional $125/month in order to shelter $3375 (or whatever the more correct numbers are based on employer's family contribution etc) from taxes.
If I do not purchase insurance through my employer, my wife's employer charges a $125 per month spousal surcharge.
All that said, I am still confused how OP can be covered under HMO but his wife can claim him on her HSA (as family coverage).
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Artsdoctor
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Re: HSA Family $6,750 limit questions

Post by Artsdoctor »

"Self-only HDHP coverage is an HDHP covering only an eligible individual. Family HDHP coverage is an HDHP covering an eligible individual and at least one other individual (whether or not that individual is an eligible individual).

How are we interpreting this IRS definition?
Topic Author
Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

an_asker wrote:
Spirit Rider wrote:[...]
Bottom line, you have hit the jackpot.
Are you sure? To me, it appears that OP is paying an additional $125/month in order to shelter $3375 (or whatever the more correct numbers are based on employer's family contribution etc) from taxes.
If I do not purchase insurance through my employer, my wife's employer charges a $125 per month spousal surcharge.
All that said, I am still confused how OP can be covered under HMO but his wife can claim him on her HSA (as family coverage).
The $125 per spousal surcharge is only if I don't have medical insurance from my employer. Since I have medical insurance from my employer, I am not charged that surcharge.

The surcharge is avoided if the spouse is not employed or has their own insurance (in addition to what her company provides)

That's why I previously had my own HDHP in addition to her HDHP covering both of us.
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
Spirit Rider
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Re: HSA Family $6,750 limit questions

Post by Spirit Rider »

an_asker wrote:
Spirit Rider wrote:[...]
Bottom line, you have hit the jackpot.
Are you sure? To me, it appears that OP is paying an additional $125/month in order to shelter $3375 (or whatever the more correct numbers are based on employer's family contribution etc) from taxes.
No, the OP's wife will not be subject to the $125/month fee, because he IS getting his $24/month HMO coverage.
If I do not purchase insurance through my employer, my wife's employer charges a $125 per month spousal surcharge.
All that said, I am still confused how OP can be covered under HMO but his wife can claim him on her HSA (as family coverage).
They can not double dip on coverage, but there is no problem being covered under more than one plan. This is the precise reason why his wife's company has the no spouse coverage surcharge.

He and his wife just happen to have such inexpensive health insurance options that make this feasible. In most cases the plan costs would make this counter-productive.

P.S. Oops the OP bet me to it.
Last edited by Spirit Rider on Thu Oct 27, 2016 1:31 pm, edited 1 time in total.
Topic Author
Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

Joel wrote:
Spirit Rider wrote:To further clarify there are actually three issues here.

HSA contribution limit: This is based solely on the type of plan. A family HDHP plan, a family HSA contribution limit.

HSA covered individual: The plan holder and if a family plan, spouse and dependents.

HSA eligible individual: You are an eligible individual if you are a covered under a HDHP, you have no other health coverage (including Medicare) and you are not a dependent.

So the answers if your wife gets the family plan are:
  1. Her contribution limit is the family plan limit ($6,750) - employer family contribution ($1,200) = $5,550.
  2. You are a covered individual and her HSA account may be used for any of her or your out-of-pocket qualified medical expenses including deductible, co-pays, other unreimbursed medical expenses, vision/dental care, etc...
  3. You are not an eligible individual and may not make HSA contributions to you own account.
Bottom line, you have hit the jackpot.
That was my original interpretation as well.
Of course, now I need to determine whether or not the increase in deductible for the family plan actually makes it worth getting the additional $600 employer contribution (and the benefits of sheltering $2,800 [$6,750 - $3,350 - $600] from federal taxes). Given that we are planning to have our first child this year, it may very well not be.

$2,800 * 25% = $700 + $600 = ~$1,300 in savings by getting access to the family limit. I think the deductible goes up by right around that amount.
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
Topic Author
Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

Spirit Rider wrote:
an_asker wrote:
Spirit Rider wrote:[...]
Bottom line, you have hit the jackpot.
Are you sure? To me, it appears that OP is paying an additional $125/month in order to shelter $3375 (or whatever the more correct numbers are based on employer's family contribution etc) from taxes.
No, the OP's wife will not be subject to the $125/month fee, because he IS getting his $24/month$24/year HMO coverage.
See bolded edit.
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
Spirit Rider
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Re: HSA Family $6,750 limit questions

Post by Spirit Rider »

Artsdoctor wrote:"Self-only HDHP coverage is an HDHP covering only an eligible individual. Family HDHP coverage is an HDHP covering an eligible individual and at least one other individual (whether or not that individual is an eligible individual).

How are we interpreting this IRS definition?
Actually, the portion in parentheses is exactly on point.

It is still a family plan even if the individual(s) making it a family plan are not eligible individual(s) for their own HSA. In this case the spouse is covered by their own health insurance plan making them ineligible.
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Artsdoctor
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Re: HSA Family $6,750 limit questions

Post by Artsdoctor »

So it sounds as if the issue has been resolved (I think?).

The OP's wife will have a FAMILY HDHP because she is adding him to her plan. Therefore, she will be able to contribute $6,750 to her HSA.
The OP will use his employer's plan as his primary plan, and have his wife's plan as his secondary.
She will be able to reimburse him for any medical expenses he incurs in addition to reimbursing herself for any expenses she incurs.

The last thing I would strongly recommend, because I've been down this road before, is that he verifies which his insurance companies which one is the primary. This is done through a Coordination of Benefits form (COB). He may get a form asking if he has any additional coverage, and that has to be filled out. If this is not done correctly, it could be bureaucratic headache.
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Re: HSA Family $6,750 limit questions

Post by Spirit Rider »

Joel wrote:
Spirit Rider wrote:No, the OP's wife will not be subject to the $125/month fee, because he IS getting his $24/month$24/year HMO coverage.
See bolded edit.[/quote]
Holy Cow! Batman.

I think my brain couldn't possibly comprehend such a low amount. That is why I missed the per year in the OP.
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Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

Artsdoctor wrote:So it sounds as if the issue has been resolved (I think?).

The OP's wife will have a FAMILY HDHP because she is adding him to her plan. Therefore, she will be able to contribute $6,750 to her HSA.
The OP will use his employer's plan as his primary plan, and have his wife's plan as his secondary.
She will be able to reimburse him for any medical expenses he incurs in addition to reimbursing herself for any expenses she incurs.

The last thing I would strongly recommend, because I've been down this road before, is that he verifies which his insurance companies which one is the primary. This is done through a Coordination of Benefits form (COB). He may get a form asking if he has any additional coverage, and that has to be filled out. If this is not done correctly, it could be bureaucratic headache.
My primary is Kaiser. They don't accept the HDHP plan.

So if I use any doctors outside of Kaiser, I will use her HDHP plan.

No issues with the primary plan situation.
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
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Re: HSA Family $6,750 limit questions

Post by Artsdoctor »

^ The point I'm trying to make is that the wife has to add him to her coverage. Here, it's fortunate that he will not have to pay anything additional for this (which is pretty unusual but a good deal). She cannot have a family plan if there's only one person on the plan.
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Re: HSA Family $6,750 limit questions

Post by GTBuzz »

Joel,

That's an excellent point in regards to the increased deductible on the family plan if you are planning on having a child this year, which changes everything. If the child is going to be added to her HDHP plan anyways during the year, then there's no need for you to be on there to make it a family plan. As long as it is a family plan by December--and that family plan is maintained through the end of the following year--she can make the full family contribution for both years. I have not thought this fully through, but it may be possible to do the following:

- Have her enroll in a self-only HDHP at the beginning of the year in which you anticipate having a child (hence the lower deductible).
- Get all maternity care and childbirth done with the lower deductible self-only plan.
- After mom and baby are back home, add baby to HDHP (my employer requires this be done within 30 days).

Any costs incurred after baby is added will likely be subject to the higher deductible, but it still may be less than paying the full family deductible up front.
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Re: HSA Family $6,750 limit questions

Post by Artsdoctor »

Joel wrote:
Artsdoctor wrote:So it sounds as if the issue has been resolved (I think?).

The OP's wife will have a FAMILY HDHP because she is adding him to her plan. Therefore, she will be able to contribute $6,750 to her HSA.
The OP will use his employer's plan as his primary plan, and have his wife's plan as his secondary.
She will be able to reimburse him for any medical expenses he incurs in addition to reimbursing herself for any expenses she incurs.

The last thing I would strongly recommend, because I've been down this road before, is that he verifies which his insurance companies which one is the primary. This is done through a Coordination of Benefits form (COB). He may get a form asking if he has any additional coverage, and that has to be filled out. If this is not done correctly, it could be bureaucratic headache.
My primary is Kaiser. They don't accept the HDHP plan.

So if I use any doctors outside of Kaiser, I will use her HDHP plan.

No issues with the primary plan situation.
EXACTLY. You will have two plans: Kaiser as primary, and the HDHP as secondary. It will be your job to make sure that care is coordinated between the two companies (this is usually not done automatically and it can cause confusion).

The point many, many comments upstream, was that your wife cannot claim she has a family plan if she doesn't add you to the plan. Your name has to be on that plan.
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Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

GTBuzz wrote:Joel,

That's an excellent point in regards to the increased deductible on the family plan if you are planning on having a child this year, which changes everything. If the child is going to be added to her HDHP plan anyways during the year, then there's no need for you to be on there to make it a family plan. As long as it is a family plan by December--and that family plan is maintained through the end of the following year--she can make the full family contribution for both years. I have not thought this fully through, but it may be possible to do the following:

- Have her enroll in a self-only HDHP at the beginning of the year in which you anticipate having a child (hence the lower deductible).
- Get all maternity care and childbirth done with the lower deductible self-only plan.
- After mom and baby are back home, add baby to HDHP (my employer requires this be done within 30 days).

Any costs incurred after baby is added will likely be subject to the higher deductible, but it still may be less than paying the full family deductible up front.
Realistically, we may not have said child until 2018. We have a vacation to Italy planned for March, so we won't start trying until late February / early March anyways. With that timeframe, best case, she has the child in December 2017. It's likely it ends up happening in 2018 though.

I need to look closely at whether or not the $1,300 benefit of having family coverage is enough to make the increased deductibles worthwhile. I think it's roughly a wash in terms of dollars owed, but I will end up with an additional ~$3k in our HSA. I'll have to look closely at the two different offerings though to see what actually makes sense.
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
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Re: HSA Family $6,750 limit questions

Post by Artsdoctor »

Regarding the baby, you may really want to compare plans. It may be more affordable to have the baby on the Kaiser plan because I suspect all of those well-baby visits including vaccinations are going to be covered.

But you're right regarding individual versus family. It doesn't matter who the second person is on the wife's HDHP to be considered a family plan.
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Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

Artsdoctor wrote:Regarding the baby, you may really want to compare plans. It may be more affordable to have the baby on the Kaiser plan because I suspect all of those well-baby visits including vaccinations are going to be covered.

But you're right regarding individual versus family. It doesn't matter who the second person is on the wife's HDHP to be considered a family plan.
That's another consideration we are looking at. Except for my Kaiser plan, it costs me $140 per month to add my wife and an additional $98 per month for a family plan.

Therefore, adding my wife (or just a child) costs $1,680 per year for the plan, while making it a family plan (3+ people) costs an additional $1,176 per year.
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
nolesrule
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Re: HSA Family $6,750 limit questions

Post by nolesrule »

This thread is making my head explode. I'm glad that my workplace health insurance is so bad that the simplicity of all of us being on my wife's employer HDHP plan is a no-brainer.
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Re: HSA Family $6,750 limit questions

Post by an_asker »

nolesrule wrote:This thread is making my head explode. I'm glad that my workplace health insurance is so bad that the simplicity of all of us being on my wife's employer HDHP plan is a no-brainer.
Me too ... until last year that is, when the additional cost that they tacked on for a spouse was more than I could get employee-only coverage for myself at work!! :oops:

Now, I/we also get to do the mental arithmetic twice a year, given that our plans years are six months apart.
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Joel
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Re: HSA Family $6,750 limit questions

Post by Joel »

an_asker wrote:
nolesrule wrote:This thread is making my head explode. I'm glad that my workplace health insurance is so bad that the simplicity of all of us being on my wife's employer HDHP plan is a no-brainer.
Me too ... until last year that is, when the additional cost that they tacked on for a spouse was more than I could get employee-only coverage for myself at work!! :oops:

Now, I/we also get to do the mental arithmetic twice a year, given that our plans years are six months apart.
Oh man. Six months apart? At least our open enrollment periods have 9 days of overlap and the plans are both for the calendar year!
My investment policy statement: https://www.bogleheads.org/forum/viewtopic.php?t=190093
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Re: HSA Family $6,750 limit questions

Post by an_asker »

I think I finally realized what I was missing. The person who has both the coverages cannot have the HSA is his/her name. It will have to be in the spouse's name and he/she can claim the family HSA. This is what I had misunderstood. Why? Well, that is a long story ... and I might have not understood something else as well!

Let's say A and B are married, and A has access to an HDHP/HSA from work whereas B has access to an HMO. Which (all?) of the following six scenarios are permissible?

a) If both go with A's plan, I thought only A was HSA eligible. From reading this thread, it appears that there can be three different HSAs possibl:
  • a-1) A and B can each have an HSA with the single HSA limit,
    a-2) A can have an HSA with the family HSA limit, or
    a-3) B can have an HSA with the family HSA limit.
b) if both go with B's plan, neither is eligible for an HSA.

c) if A opts for the self-only HDHP/HSA and B opts for HMO, only A can have an HSA, and it would be the single HSA limit.

d) if A opts for the family HDHP/HSA and B opts for self-only HMO, only A can have an HSA, and it would be the family HSA limit.

I didn't think/know before this thread that a person could have both an HDHP as well as an HMO (or PPO).
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