HSA contribution limit after changing jobs mid year

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johnsmithsf
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Joined: Sat Jan 14, 2017 2:51 pm

HSA contribution limit after changing jobs mid year

Post by johnsmithsf »

I have a question regarding HSA. I just moved to a new job and now I have the option of opening an HSA through payroll deduction as now I (and my wife as a dependent) am in a high deductible health plan. I never qualified for an HSA before and until October 2018, I was in a traditional health care plan.
- As only 1 month is remaining in 2018, can I still contribute $3450 to the HSA? Or only $287.50 ($3450/12)
- My wife is currently not working, but she will start working in December 2018 and will be covered by a traditional health care plan from December 2018 onwards. As she is not currently working, and will be using my health plan (spouse), can I contribute an additional $3,450 to MY HSA?

Thanks in advance.
PFInterest
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Joined: Sun Jan 08, 2017 12:25 pm

Re: HSA contribution limit after changing jobs mid year

Post by PFInterest »

you should be able to max it out.
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southerndoc
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Re: HSA contribution limit after changing jobs mid year

Post by southerndoc »

If you have a qualified HDHP plan the last month of the year and are not also covered by a traditional plan, then you can max out your contribution as long as you maintain a qualified HDHP plan in every month of the remaining year.

https://www.hsaedge.com/2014/03/25/hsa- ... explained/
Topic Author
johnsmithsf
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Re: HSA contribution limit after changing jobs mid year

Post by johnsmithsf »

Thank you very much!
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johnsmithsf
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Re: HSA contribution limit after changing jobs mid year

Post by johnsmithsf »

southerndoc wrote: Fri Nov 23, 2018 9:24 am If you have a qualified HDHP plan the last month of the year and are not also covered by a traditional plan, then you can max out your contribution as long as you maintain a qualified HDHP plan in every month of the remaining year.

https://www.hsaedge.com/2014/03/25/hsa- ... explained/
A follow up questions
- My employer sponsored healthcare plan will not allow me to contribute more than the monthly amount (probably around $300) to the "HSA Bank" through payroll deduction. As I have been employed at this place only since November 2018, I will not be able to contribute full $3,450 through just payroll deduction. Can I open another HSA in Fidelity prior to the tax filing deadline (April 15 2019) and contribute $3,000 to it as a prior year contribution (for the year 2018)? I was not sure if it is possible as I then will end up with 2 individual HSAs for the year 2018. One at Fidelity, and other at "HSA Bank".

https://www.hsaedge.com/2014/03/20/maki ... -your-hsa/

Thanks for all your help!
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southerndoc
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Re: HSA contribution limit after changing jobs mid year

Post by southerndoc »

You can make contributions yourself. I'm not sure on timing limits. It probably needs to be open by 12/31/2018. You can fund it up until your tax deadline. I would recommend opening now and funding when you file taxes (or funding now if you have the money).

The IRS does not limit the number of HSA's you have. Only your contributions are limited. I opened mine at Fidelity, just sent in $2000 contribution (my contributions from my PEO are not up to the family limit), and instituted a rollover from HealthEquity. My PEO will continue to make contributions to HealthEquity because they have their contract with them.
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johnsmithsf
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Re: HSA contribution limit after changing jobs mid year

Post by johnsmithsf »

Thanks!
ofckrupke
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Re: HSA contribution limit after changing jobs mid year

Post by ofckrupke »

johnsmithsf wrote: Fri Nov 23, 2018 12:42 am - My wife is currently not working, but she will start working in December 2018 and will be covered by a traditional health care plan from December 2018 onwards.
Here may lie a pitfall to avoid in order for you to remain qualified to contribute to your HSA after your wife starts work. If her new employer benefit offerings include a Flexible Spending Account (FSA) plan for general medical expenses: if she does not decline enrollment in said FSA, then (to the IRS) you as her spouse will necessarily be covered by it for its full term of coverage, and this coverage will disqualify you from contributing to your HSA for every month of such FSA coverage.

So if a general-purpose FSA will be offered to her, then before she enrolls for benefits for Dec 2018 as a new employee you as a couple should weigh the mainly tax benefits of using the FSA optimally for your combined otherwise out of pocket medical expenses, against those for you maxing out your HSA, including any contributions made by your employer on your behalf. And ditto for her likely separate election procedure for calendar year 2019 benefits.
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