To HSA or not?

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9liner
Posts: 79
Joined: Wed Jan 18, 2017 1:03 pm

To HSA or not?

Post by 9liner » Thu Oct 19, 2017 4:23 pm

The DW just received her open enrollment packet from her employer. She has historically been covered by the most expensive PPO offered by her employer. In May of this year, I went active duty with the National Guard and we are both currently covered under TRICARE. She decided to keep her employer's policy until open enrollment so that she didn't have to worry about changing physicians immediately making TRICARE a secondary payer for her. Reading through forums, I have recently become interested in opening an HSA. We both max out our 401k/TSP and Roth IRAs and I figured the HSA would provide additional avenues for tax sheltering. Her employer's HSA plan allows for $6900 per year contribution and they will match dollar-for-dollar up to $500. So here are my questions:

1. The open enrollment brochure states "Individuals MAY be excluded from an HSA if they are: covered under a spouse's employer's health plan that is not a Qualified High Deductible Plan". Since TRICARE is not a QHDP, is she automatically excluded?

2. The game plan would be for her to elect into a QHDP at $78.00 per pay ($2028/year) and open an HSA. Would the tax advantage of maxing out the HSA outweigh the costs of the QHDP?

In essence, we would both be covered under her plan with TRICARE picking up all of the deductible costs as the second payer. I was looking at this as a way to defer taxes on an additional $6900 per year but maybe I am missing something. If this doesn't work out, we are just going to drop her insurance and save ourselves $150 per month since she will still be covered by TRICARE.

Thanks in advance.

elcadarj
Posts: 41
Joined: Tue Aug 30, 2016 8:21 am

Re: To HSA or not?

Post by elcadarj » Thu Oct 19, 2017 4:45 pm

Neither you nor your spouse can have an HSA if eligible for Tricare. I’m facing this myself in two years when I reach 60 and become eligible for TRICARE. I’m currently in the retired reserve grey zone. I have an HDHP with an HSA through big energy corp and I will not be able to add to it.

USNR-RETIRED

9liner
Posts: 79
Joined: Wed Jan 18, 2017 1:03 pm

Re: To HSA or not?

Post by 9liner » Thu Oct 19, 2017 5:14 pm

Well that answers my question. Thanks! :(

Easy Rhino
Posts: 3267
Joined: Sun Aug 05, 2007 11:13 am
Location: San Diego

Re: To HSA or not?

Post by Easy Rhino » Thu Oct 19, 2017 6:01 pm

If the company makes generous contributions to her HSA, then you could theoretically "turn a profit" as long as she never had any health spending.

But dual coverage would be a no no, as already noted.

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