HSA Contribution

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taxi22
Posts: 26
Joined: Sun Jan 28, 2018 10:31 am

HSA Contribution

Post by taxi22 » Thu Jan 03, 2019 10:55 pm

I have a high deductible plan (HDP) right now and contribute to an HSA. If I change my employer/plan mid year, can I contribute the yearly limit (upto $6000) before I leave my HDP ? or is that a no no

Soon2BXProgrammer
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Joined: Mon Nov 24, 2014 11:30 pm

Re: HSA Contribution

Post by Soon2BXProgrammer » Thu Jan 03, 2019 11:00 pm

that is a no no. unless your next plan is also a HDHP.

you have to contribute based on the number of months you are under an HDHP. There is some rules that i dont' remember about how to calculate if you get the month or not.

furthermore, if the employer made a 1 time contribution and you then are contributing the rest spread over the year.. be careful, because you could be over the limit based on the number of months.

jebmke
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Re: HSA Contribution

Post by jebmke » Thu Jan 03, 2019 11:02 pm

The contribution limit ($3,450 for an individual and $6,900 for family plan) is prorated for the months you are actually in the HSA-eligible plan.
When you discover that you are riding a dead horse, the best strategy is to dismount.

Topic Author
taxi22
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Joined: Sun Jan 28, 2018 10:31 am

Re: HSA Contribution

Post by taxi22 » Thu Jan 03, 2019 11:04 pm

Soon2BXProgrammer wrote:
Thu Jan 03, 2019 11:00 pm
that is a no no. unless your next plan is also a HDHP.

you have to contribute based on the number of months you are under an HDHP. There is some rules that i dont' remember about how to calculate if you get the month or not.

furthermore, if the employer made a 1 time contribution and you then are contributing the rest spread over the year.. be careful, because you could be over the limit based on the number of months.
Thank you!

Topic Author
taxi22
Posts: 26
Joined: Sun Jan 28, 2018 10:31 am

Re: HSA Contribution

Post by taxi22 » Thu Jan 03, 2019 11:04 pm

jebmke wrote:
Thu Jan 03, 2019 11:02 pm
The contribution limit ($3,450 for an individual and $6,900 for family plan) is prorated for the months you are actually in the HSA-eligible plan.
Thanks!

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LinusP
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Re: HSA Contribution

Post by LinusP » Thu Jan 03, 2019 11:17 pm

jebmke wrote:
Thu Jan 03, 2019 11:02 pm
The contribution limit ($3,450 for an individual and $6,900 for family plan) is prorated for the months you are actually in the HSA-eligible plan.
Note that the contribution limits went up for 2019: $3500 for individuals and $7000 for families.

wxz76
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Joined: Sat Jun 09, 2012 1:10 pm

Re: HSA Contribution

Post by wxz76 » Thu Jan 03, 2019 11:52 pm

jebmke wrote:
Thu Jan 03, 2019 11:02 pm
The contribution limit ($3,450 for an individual and $6,900 for family plan) is prorated for the months you are actually in the HSA-eligible plan.
I started a new job last November and switched from a PPO to HDHP and I was able to contribute the full amount for 2018. Wonder if my company made a mistake.

Topic Author
taxi22
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Joined: Sun Jan 28, 2018 10:31 am

Re: HSA Contribution

Post by taxi22 » Fri Jan 04, 2019 12:08 am

wxz76 wrote:
Thu Jan 03, 2019 11:52 pm
jebmke wrote:
Thu Jan 03, 2019 11:02 pm
The contribution limit ($3,450 for an individual and $6,900 for family plan) is prorated for the months you are actually in the HSA-eligible plan.
I started a new job last November and switched from a PPO to HDHP and I was able to contribute the full amount for 2018. Wonder if my company made a mistake.
Thanks to the response above, I found this online. Since you were eligible on the first day of the last month of the year, you could put the whole yearly amount in...SWEET!


If you enroll between Jan. 2 and Dec. 1, you can adopt one of two approaches:

- Pro-rate: You can pro-rate your contribution based on the number of months that you
were HSA-eligible, as outlined above. For example, if you start a new job Oct. 15, 2019,
enroll in an HSA-qualified medical plan immediately and meet all eligibility
requirements, you aren’t be HSA-eligible until Nov. 1. You can contribute no more than
2/12 of the $3,500 annual maximum (self-only contract), or $583.33. The comparable
figure for family coverage is $1,166.66.

-Last-Month Rule: If you become eligible by Dec. 1, you can contribute up to the
contribution limit for the calendar year (in our example, up to the full $3,500 rather than
only $583.33). You must remain HSA-eligible through the “testing period” (through the
end of the following calendar year). If you lose eligibility before the end of the testing
period for any reason other than disability or death, any contributions in excess of the
pro-rated amount (up to $2,916.66) are included in your taxable income and subject to an
additional 10% penalty unless you lose HSA eligibility during the testing period as a
result of disability or death.

BusterMcTaco
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Re: HSA Contribution

Post by BusterMcTaco » Fri Jan 04, 2019 12:09 am

wxz76 wrote:
Thu Jan 03, 2019 11:52 pm
jebmke wrote:
Thu Jan 03, 2019 11:02 pm
The contribution limit ($3,450 for an individual and $6,900 for family plan) is prorated for the months you are actually in the HSA-eligible plan.
I started a new job last November and switched from a PPO to HDHP and I was able to contribute the full amount for 2018. Wonder if my company made a mistake.
You can do this under the "last month rule", but you must have and HSA-eligible HDHP plan for all of 2019, otherwise you indeed overcontributed and will have to pay excise (6%) on 11/12th of it every year until fixed. See some other recent threads about how to fix it (either withdraw excess contributions, or apply them to future years of eligibility).
taxi22 wrote:Thanks to the response above, I found this online. Since you were eligible on the first day of the last month of the year, you could put the whole yearly amount in...SWEET!
No. See above. You must also meet the "testing period".

Topic Author
taxi22
Posts: 26
Joined: Sun Jan 28, 2018 10:31 am

Re: HSA Contribution

Post by taxi22 » Fri Jan 04, 2019 12:59 am

BusterMcTaco wrote:
Fri Jan 04, 2019 12:09 am


You can do this under the "last month rule", but you must have and HSA-eligible HDHP plan for all of 2019, otherwise you indeed overcontributed and will have to pay excise (6%) on 11/12th of it every year until fixed. See some other recent threads about how to fix it (either withdraw excess contributions, or apply them to future years of eligibility).


No. See above. You must also meet the "testing period".
So for the "testing period" rule. If I started my job in June 2018, which has HDHP. I can contribute 7/12th of contribution limit for 2018? And can contribute to the limit if I have the HDHP all of 2019...BUT if I leave my job in June 2019, I can still contributed 6/12th of the 2019 limit?

This is really helpful. Thanks!

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BrandonBogle
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Re: HSA Contribution

Post by BrandonBogle » Fri Jan 04, 2019 1:53 am

taxi22 wrote:
Fri Jan 04, 2019 12:59 am
So for the "testing period" rule. If I started my job in June 2018, which has HDHP. I can contribute 7/12th of contribution limit for 2018? And can contribute to the limit if I have the HDHP all of 2019...BUT if I leave my job in June 2019, I can still contributed 6/12th of the 2019 limit?

This is really helpful. Thanks!
Essentially yes, but I would stop thinking of it as starting/leaving your job versus being enrolled in any HSA-eligible HDHP plan, be it with your current employer, another employer, or a private policy.

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