HSA "Self-only" vs Family contributions

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rick0
Posts: 44
Joined: Thu Jan 31, 2013 10:54 pm

HSA "Self-only" vs Family contributions

Post by rick0 » Tue Oct 31, 2017 12:18 pm

Hi,

I've been a HDHP/HSA user since before I retired. I just realized that I haven't been maximizing this benefit.
I've reviewed IRS Pub969, and anything I can find online, but wanted to see if everyone agrees with my analysis.

I'm 62, wife is 60. We've been using an HSA since before I was retired - Employer sponsored Family HDHP, so I used the
family contribution limits, including the catchup, when I was eligible. I use a "Use the HSA for big stuff, pay small stuff
out of pocket" sort of philosophy - keeping receipts for later reimbursement - and accumulating assets.

After retirement, we now have ACA (Obamacare) HDHP insurance, and I've continued to use the family contribution limit + catchup.

I'm doing 2018 planning and realized that I can get a larger total HSA contribution by having 2 individual HSA's for my wife and I,
since we BOTH get the catchup.
- Family Max contribution for 2018 is $6900+$1000 = $7900
- Two self-only contributions are 2 * $3450+$1000 = $8900

As far as I can see the ACA policies we have are considered self-only, although I've never seen this explicitly stated.

Also, it appears once the money is in a HSA, there's no restriction on who's expenses can be paid, mine or my wife's.
So if my wife opens an HSA in 2018 and contributes up to the self-only contribution limits, the account can be used to
pay my expenses, and vice-versa of course.

Can anyone see any problems with this, or did I just miss something obvious? Thanks..

Spirit Rider
Posts: 6486
Joined: Fri Mar 02, 2007 2:39 pm

Re: HSA "Self-only" vs Family contributions

Post by Spirit Rider » Tue Oct 31, 2017 1:09 pm

Under the HSA eligibility rules, catch-up contribution rules and the "rules for married people" which are listed in Publication 969, you do not have to have two separate individual plans to make the maximum contributions, including two catch-up contributions.

A spouse covered under a qualifying HDHP who does not otherwise have disqualifying "other" insurance is considered an HSA eligible individual.

In order to make a catch-up contribution, each HSA eligible individual must open and make their catch-up contribution to their own HSA.

The "rules for married people" allow the married couple to designate how they want to split up the non-catch-up contribution space.

In your example, the maximum family contribution for the two of you is is $8,900. $1,000 catch-up for each of you to your own HSA accounts and $6,900 to be split between the two accounts in any way you choose.

Like anywhere else, the ACA exchange policies can be either family or individual. Since you enroll by stating the number of persons in the household. I would think you would only be offered family policies, because subsidies/cost sharing is by MFJ MAGI.

Each HSA account can be used to pay for a spouse's and/or dependent's past, present or future qualified medical expenses, whether then an HSA eligible individual or not. Also, as you know an HSA can be used at anytime in the future to reimburse for a past unreimbursed qualified medical expense.

Note: An HSA can not be used to pay qualified medical expenses prior to when the first account was opened. So if this is your spouse's first HSA account, that account can not be used to pay for either of your qualified medical expenses prior to when she opened the account.

rick0
Posts: 44
Joined: Thu Jan 31, 2013 10:54 pm

Re: HSA "Self-only" vs Family contributions

Post by rick0 » Mon Nov 13, 2017 10:12 pm

Spirit Rider wrote:
Tue Oct 31, 2017 1:09 pm
Like anywhere else, the ACA exchange policies can be either family or individual. Since you enroll by stating the number of persons in the household. I would think you would only be offered family policies, because subsidies/cost sharing is by MFJ MAGI.
Followup - I tracked this down and Spirit Rider is correct - my ACA policies are considered Family. The MFJ MAGI is the key. This isn't obvious on the surface.

...And this point makes my entire original post moot. C'est la vie!

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