Spouse got a job, now have 2 HSAs

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Topic Author
sedonabogle
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Spouse got a job, now have 2 HSAs

Post by sedonabogle »

My wife recently got a job so after years of individual HSA I have a quick question on how the family limit works.

Can I contribute more than $3550 to mine, and as long as hers + mine is less than $7100, we're good? Does that assume we file jointly too?

1 account would be easier, but the way high deductible plans work it seems way more beneficial to each have one.

Thanks for the insight.
kd2008
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Re: Spouse got a job, now have 2 HSAs

Post by kd2008 »

sedonabogle wrote: Mon Aug 10, 2020 11:14 am Can I contribute more than $3550 to mine, and as long as hers + mine is less than $7100, we're good?
Yes, generally. Include any employer contributions to HSA when you tally up $7100;

You have to make sure both were on HDHP throughout the whole year -either on separate plans or on one plan. Exacts details can be finicky depending in the specific situation.
fabdog
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Re: Spouse got a job, now have 2 HSAs

Post by fabdog »

You can still use just one HSA, even if your spouse is employed. The family limit applies across the accounts.

You'd want her to have one if her company is making contributions, and if she wants to make contributions that don't have FICA taken out

Where having 2 accounts is definitely necessary is when you are over age 55, and each of you can make a $1K catch up contribution. Those must go into individual accounts, so to do the max catch up, $1K into each of your accounts.

If her employer is not contributing, and you are having the full family amount taken from your check, then your spouse doesn't need an account.

Mike
livesoft
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Re: Spouse got a job, now have 2 HSAs

Post by livesoft »

Things will depend on your ages and whether you both have HDHP and/or if you have children/dependents.

You will have to decide if the total cost of your health insurance premiums are lower with 2 individual plans (one at each employer) or one family plan at the lower cost employer. Or if you have children, maybe children are less expensive on one employer's plan than the other.

Also if either is older than 55 by the end of the current tax year, then additional considerations come into play.
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Planner01
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Re: Spouse got a job, now have 2 HSAs

Post by Planner01 »

Wait a sec... I have an HSA for which I contributed $7100 a year to. My medical benefits include only our child and myself. DH has his own medical insurance at his job. We were thinking that next year he’d sign up for the high deductible medical option so that he can then contribute $3550 to it. Is that doable or does it cap at the $7100 which I contribute to?
livesoft
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Re: Spouse got a job, now have 2 HSAs

Post by livesoft »

Planner01 wrote: Mon Aug 10, 2020 12:18 pm Is that doable or does it cap at the $7100 which I contribute to?
Not doable if you are married. See IRS Publication 969 https://www.irs.gov/pub/irs-pdf/p969.pdf but someone will correct me if I am wrong.

The employer contribution to one's HSA may make one employer's plan a better deal than the other employer's plan.
Last edited by livesoft on Mon Aug 10, 2020 12:27 pm, edited 1 time in total.
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the way
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Re: Spouse got a job, now have 2 HSAs

Post by the way »

If it's two individual plans, then you must have separate HSAs subject to the individual limit. You can't overfund one and underfund the other either.

For the last question, there is a family limit between spouses, so you can't exceed that even if you have one family coverage and one individual. (The strange loophole is when the company allows domestic partners - technically they aren't spouses so they can EACH open an HSA and do the max FAMILY limit. This applies to adult children too under the family plan.)
bluebolt
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Re: Spouse got a job, now have 2 HSAs

Post by bluebolt »

Planner01 wrote: Mon Aug 10, 2020 12:18 pm Wait a sec... I have an HSA for which I contributed $7100 a year to. My medical benefits include only our child and myself. DH has his own medical insurance at his job. We were thinking that next year he’d sign up for the high deductible medical option so that he can then contribute $3550 to it. Is that doable or does it cap at the $7100 which I contribute to?
It caps at the $7100.
Topic Author
sedonabogle
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Re: Spouse got a job, now have 2 HSAs

Post by sedonabogle »

Thanks for the quick replies everyone.

The reason it is tricky is because we started 2020 under a family HDHP anticipating only 1 job. Then in May my wife got a job, and it made more financial sense to go on her own HDHP with that employer rather than stay on mine since mine has a working spouse surcharge. The employer contributes to her HSA as an incentive.

Publication 969 under rules for married people says "If either spouse has family HDHP coverage, both spouses are treated as having family HDHP coverage." Which was true for the first part of this year - but would that mean we follow that for all of 2020, or the limit gets pro-rated/split, or goes back to individual limits?
bluebolt
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Re: Spouse got a job, now have 2 HSAs

Post by bluebolt »

One other tricky thing to be aware of. If your spouse is not covered by an HSA and decides to fund a medical FSA, you are ineligible for the HSA since technically you are covered by their FSA.
Planner01
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Re: Spouse got a job, now have 2 HSAs

Post by Planner01 »

bluebolt wrote: Mon Aug 10, 2020 12:48 pm One other tricky thing to be aware of. If your spouse is not covered by an HSA and decides to fund a medical FSA, you are ineligible for the HSA since technically you are covered by their FSA.
Is that assuming that they are under the same medical insurance, right? If they each have separate medical insurance through their respective jobs and one is using an FSA, it would not affect the ability for the other spouse to contribute to the HSA through their own job?
bluebolt
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Re: Spouse got a job, now have 2 HSAs

Post by bluebolt »

Planner01 wrote: Mon Aug 10, 2020 12:52 pm
bluebolt wrote: Mon Aug 10, 2020 12:48 pm One other tricky thing to be aware of. If your spouse is not covered by an HSA and decides to fund a medical FSA, you are ineligible for the HSA since technically you are covered by their FSA.
Is that assuming that they are under the same medical insurance, right? If they each have separate medical insurance through their respective jobs and one is using an FSA, it would not affect the ability for the other spouse to contribute to the HSA through their own job?
That is not correct.

https://www.hsaedge.com/2017/08/17/can- ... a-and-fsa/
Planner01
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Re: Spouse got a job, now have 2 HSAs

Post by Planner01 »

bluebolt wrote: Mon Aug 10, 2020 1:31 pm
Planner01 wrote: Mon Aug 10, 2020 12:52 pm
bluebolt wrote: Mon Aug 10, 2020 12:48 pm One other tricky thing to be aware of. If your spouse is not covered by an HSA and decides to fund a medical FSA, you are ineligible for the HSA since technically you are covered by their FSA.
Is that assuming that they are under the same medical insurance, right? If they each have separate medical insurance through their respective jobs and one is using an FSA, it would not affect the ability for the other spouse to contribute to the HSA through their own job?
That is not correct.

https://www.hsaedge.com/2017/08/17/can- ... a-and-fsa/
Well we made this mistake this year. I had no idea until a week ago that DH was using an FSA acct at his job. Meanwhile I’ve been contributing and investing in an HSA. So what happens now??

I really wish these accounts would be individual, like the retirement accts. This is too complicated mixing it up as family.
bloom2708
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Re: Spouse got a job, now have 2 HSAs

Post by bloom2708 »

Planner01 wrote: Mon Aug 10, 2020 1:41 pm I really wish these accounts would be individual, like the retirement accts. This is too complicated mixing it up as family.
The accounts are individually owned. The $7,100 is total for both. You can split that 100/0, 0/100, 50/50, 30/70 etc. Any which way.

The employer may or may not contribute. Also, just like a Roth, you can have 3,4,5 individual HSA spread all over. You just can't exceed the $7,100 unless you are 60+ and can do the catch up $1,000.
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livesoft
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Re: Spouse got a job, now have 2 HSAs

Post by livesoft »

sedonabogle wrote: Mon Aug 10, 2020 12:46 pm Thanks for the quick replies everyone.

The reason it is tricky is because we started 2020 under a family HDHP anticipating only 1 job. Then in May my wife got a job, and it made more financial sense to go on her own HDHP with that employer rather than stay on mine since mine has a working spouse surcharge. The employer contributes to her HSA as an incentive.
Not too tricky. You just go figure out what you want to do for the rest of the year, go to HR and tell them circumstances have changed, and change your contributions. For instance, you could switch to $0 contribution for rest of year and spouse could make enough contributions to get to $7100. That is, if BOTH of you were covered by an HDHP for all 12 months which seems to be the case. But is the spouse supplement charged by your plan more than your spouse paying for their own individual plan? Or is a family plan at your spouse's employer less than the plan at your employer with you and children on her plan?

You essentially answered, "Yes" with your "made more financial sense", but I am double checking.
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Topic Author
sedonabogle
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Re: Spouse got a job, now have 2 HSAs

Post by sedonabogle »

livesoft wrote: Mon Aug 10, 2020 2:09 pm
sedonabogle wrote: Mon Aug 10, 2020 12:46 pm Thanks for the quick replies everyone.

The reason it is tricky is because we started 2020 under a family HDHP anticipating only 1 job. Then in May my wife got a job, and it made more financial sense to go on her own HDHP with that employer rather than stay on mine since mine has a working spouse surcharge. The employer contributes to her HSA as an incentive.
Not too tricky. You just go figure out what you want to do for the rest of the year, go to HR and tell them circumstances have changed, and change your contributions. For instance, you could switch to $0 contribution for rest of year and spouse could make enough contributions to get to $7100. That is, if BOTH of you were covered by an HDHP for all 12 months which seems to be the case. But is the spouse supplement charged by your plan more than your spouse paying for their own individual plan? Or is a family plan at your spouse's employer less than the plan at your employer with you and children on her plan?

You essential wrote, "Yes" with your "made more financial sense", but I am double checking.
Thanks for the double-check. I ran the numbers and all the options for the health plans and going on separate plans worked out the best. The working spouse surcharge was quite hefty, which could've made sense if we had kids to cover.

Correct, both of us will be on HDHP for the entire year, and for the first 4 months it was a family high deductible plan. Our forecasted 2020 contributions (including employer's) we'll be around $6000. I've spent years maxing my individual out so I'm ok leaving a bit on the table this year.

So based on this info, we're ok if we file married jointly and are under $7100 for all HSA contributions (even though my particular account will have closer to $5000)?
livesoft
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Re: Spouse got a job, now have 2 HSAs

Post by livesoft »

sedonabogle wrote: Mon Aug 10, 2020 2:18 pmSo based on this info, we're ok if we file married jointly and are under $7100 for all HSA contributions (even though my particular account will have closer to $5000)?
Yes, you can fill out Form 8889 for each of you for 2020 and see how it will all play out. Note form says right at the top " If both spouses have
HSAs, see instructions"
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the way
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Re: Spouse got a job, now have 2 HSAs

Post by the way »

There are 2 different questions going on, so the answers are getting mixed.
bloom2708 wrote: Mon Aug 10, 2020 1:54 pm The accounts are individually owned. The $7,100 is total for both. You can split that 100/0, 0/100, 50/50, 30/70 etc. Any which way.
No, if both are on individual plans, then you can't go 100/0 or 0/100, only 50/50 if maxed (ie neither can exceed the individual limit).

If you have one family and one individual plan (where family plan only covers 1 spouse+kids), then you can go 100/0 or 70/30 but not 0/100 or 30/70. (Individual spouse can't exceed the individual limit, but the family spouse can.)
sedonabogle wrote: Mon Aug 10, 2020 2:18 pm So based on this info, we're ok if we file married jointly and are under $7100 for all HSA contributions (even though my particular account will have closer to $5000)?
So this one depends on if you are downgrading from a family plan to individual, or simply removing your wife and keeping the family plan (because you have kids). The latter is probably safe (you could anywhere from 100/0 to 33/66).

But if you now have 2 individual plans, then the first 4 months you could go 100/0 or 0/100 or anything in between, but the rest of the year it has to be 50/50 if maxed. Prorated at 1/3, it seems the max in the husband's HSA would be only 3550 + 1183 < $5000. If wife was covered on May 1, that would count as 5 months, so then the limit is 3550 + 1479 > $5000. So yes, a little bit tricky.
TropikThunder
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Re: Spouse got a job, now have 2 HSAs

Post by TropikThunder »

sedonabogle wrote: Mon Aug 10, 2020 11:14 am My wife recently got a job so after years of individual HSA I have a quick question on how the family limit works.

Can I contribute more than $3550 to mine, and as long as hers + mine is less than $7100, we're good? Does that assume we file jointly too?

1 account would be easier, but the way high deductible plans work it seems way more beneficial to each have one.

Thanks for the insight.
Has your wife been on your family HDHP the whole time before she got her job? If so you could have been making a family contribution to your HSA the whole time. It’s. It unclear from your post whether that has been the case.

A big part of HSA confusion is the fact that you can make a Family contribution to an Individual HSA if you have the right coverage.
Topic Author
sedonabogle
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Re: Spouse got a job, now have 2 HSAs

Post by sedonabogle »

Appreciate the replies everyone. You got me looking in the right direction now.
Topic Author
sedonabogle
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Re: Spouse got a job, now have 2 HSAs

Post by sedonabogle »

TropikThunder wrote: Mon Aug 10, 2020 3:28 pm
sedonabogle wrote: Mon Aug 10, 2020 11:14 am My wife recently got a job so after years of individual HSA I have a quick question on how the family limit works.

Can I contribute more than $3550 to mine, and as long as hers + mine is less than $7100, we're good? Does that assume we file jointly too?

1 account would be easier, but the way high deductible plans work it seems way more beneficial to each have one.

Thanks for the insight.
Has your wife been on your family HDHP the whole time before she got her job? If so you could have been making a family contribution to your HSA the whole time. It’s. It unclear from your post whether that has been the case.

A big part of HSA confusion is the fact that you can make a Family contribution to an Individual HSA if you have the right coverage.
She was on my family HDHP until mid May. Employer contributed $2k and I contributed $1k by May 1.
bluebolt
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Re: Spouse got a job, now have 2 HSAs

Post by bluebolt »

Planner01 wrote: Mon Aug 10, 2020 1:41 pm
bluebolt wrote: Mon Aug 10, 2020 1:31 pm
Planner01 wrote: Mon Aug 10, 2020 12:52 pm
bluebolt wrote: Mon Aug 10, 2020 12:48 pm One other tricky thing to be aware of. If your spouse is not covered by an HSA and decides to fund a medical FSA, you are ineligible for the HSA since technically you are covered by their FSA.
Is that assuming that they are under the same medical insurance, right? If they each have separate medical insurance through their respective jobs and one is using an FSA, it would not affect the ability for the other spouse to contribute to the HSA through their own job?
That is not correct.

https://www.hsaedge.com/2017/08/17/can- ... a-and-fsa/
Well we made this mistake this year. I had no idea until a week ago that DH was using an FSA acct at his job. Meanwhile I’ve been contributing and investing in an HSA. So what happens now??

I really wish these accounts would be individual, like the retirement accts. This is too complicated mixing it up as family.
I didn't realize until the full calendar year had passed. I had to request a full distribution of the HSA funds and add the full amount back to my taxes as income. I did not have any earnings, so didn't have to pay taxes on earnings.

I'm not sure if you have different options since you're mid-year.
TropikThunder
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Re: Spouse got a job, now have 2 HSAs

Post by TropikThunder »

sedonabogle wrote: Mon Aug 10, 2020 3:41 pm
TropikThunder wrote: Mon Aug 10, 2020 3:28 pm
sedonabogle wrote: Mon Aug 10, 2020 11:14 am My wife recently got a job so after years of individual HSA I have a quick question on how the family limit works.

Can I contribute more than $3550 to mine, and as long as hers + mine is less than $7100, we're good? Does that assume we file jointly too?

1 account would be easier, but the way high deductible plans work it seems way more beneficial to each have one.

Thanks for the insight.
Has your wife been on your family HDHP the whole time before she got her job? If so you could have been making a family contribution to your HSA the whole time. It’s. It unclear from your post whether that has been the case.

A big part of HSA confusion is the fact that you can make a Family contribution to an Individual HSA if you have the right coverage.
She was on my family HDHP until mid May. Employer contributed $2k and I contributed $1k by May 1.
What about last year?
Topic Author
sedonabogle
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Re: Spouse got a job, now have 2 HSAs

Post by sedonabogle »

TropikThunder wrote: Mon Aug 10, 2020 5:44 pm
sedonabogle wrote: Mon Aug 10, 2020 3:41 pm
TropikThunder wrote: Mon Aug 10, 2020 3:28 pm
sedonabogle wrote: Mon Aug 10, 2020 11:14 am My wife recently got a job so after years of individual HSA I have a quick question on how the family limit works.

Can I contribute more than $3550 to mine, and as long as hers + mine is less than $7100, we're good? Does that assume we file jointly too?

1 account would be easier, but the way high deductible plans work it seems way more beneficial to each have one.

Thanks for the insight.
Has your wife been on your family HDHP the whole time before she got her job? If so you could have been making a family contribution to your HSA the whole time. It’s. It unclear from your post whether that has been the case.

A big part of HSA confusion is the fact that you can make a Family contribution to an Individual HSA if you have the right coverage.
She was on my family HDHP until mid May. Employer contributed $2k and I contributed $1k by May 1.
What about last year?
Last year we got married and she had no job. It was me on individual HDHP for more than half the year, then in fall we went to spouse + employee HDHP and I didn't up my HSA contribution limit, just stayed at the individual limit. Filed married jointly.
Werty
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Re: Spouse got a job, now have 2 HSAs

Post by Werty »

I can't follow if you have kids or not. If you do, something to consider would be you and your spouse's income. HSA are the only contributions to come out prior to FICA taxes, so if one spouse makes under the yearly limt for social security tax and one spouse is over, it saves more taxes to have the spouse under the limit make the contributions to the HSA. (Other variables of course play a big role as well.)
Topic Author
sedonabogle
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Re: Spouse got a job, now have 2 HSAs

Post by sedonabogle »

Werty wrote: Mon Aug 10, 2020 10:08 pm I can't follow if you have kids or not. If you do, something to consider would be you and your spouse's income. HSA are the only contributions to come out prior to FICA taxes, so if one spouse makes under the yearly limt for social security tax and one spouse is over, it saves more taxes to have the spouse under the limit make the contributions to the HSA. (Other variables of course play a big role as well.)
Sorry - no kids yet. I mentioned we previously had family coverage but it was really spouse coverage.
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