Brenda N.

Two HDHPs and an HSA

10 posts in this topic

I'm not clear about the new HSA guidance. Can a person have HDHP coverage as an employee, and still be an "eligible individual" for an HSA if also covered as a dependent under their spouse's HDHP? Thanks for any clarification you can give.

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My understanding is no, the HDHP and HSA can be the only plans they are enrolled in. At least that was what they told us at a seminar back in February or March, has the recent guidance changed that.

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Q-31/A31-3, in the new guidance appears to have both spouses as having family plans, and treats each as being eligible individuals. The example doesn't say one spouse can't cover the other.

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More specifically, the eligibility rules to have an HSA are as follows:

• The individual is covered by a “high deductible health plan” or “HDHP;”

• The individual is not covered by any health plan that is not a HDHP that provides coverage for benefits covered under the HDHP;

• The individual is not entitled to benefits under Medicare (generally, has not yet reached age 65); and

• The individual is not able to be claimed as a dependent on someone else’s tax return.

So, if a husband and wife both have HDHP's at their respective employers, they can both enroll and have HSA's. There are special rules for calculating the limit for married individuals when one of them has family coverage-- you'll have to check the IRS regs directly.

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Why would this individual have coverage under 2 different HDHPs? Unless both employers provide free coverage, it seems that this employee might be paying for coverage that will not pay any benefits. Of course it might be that individual coverage from the first employer might be mandatory and free but dependent coverage is cheaper under the spouse's plan but where children coverage is not an option.

In any case, the employee even if covered under 2 plans is still covered only by HDHPs and should be eligible for an HSA.

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Do you know how the maximum contribution limit is determined for married couples with two HSA's? Can the family be covered under one employer's HDHP and both have HSA's?

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One fellow in another chat group said that any number of health plans are available, as long as coverage is not provided under the deductible. As Joannc stated, the other plan cannot cover benefits under the HDHP. It looks like any plan other than "permitted insurance," is a very limited benefits plan.

Don Levit

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There is no problem being covered by 2 HDHPs (as long as each satisfies the definition of a HDHP). Having double coverage is not much different than having double coverage under a low deductible plan. Once you hit the deductibe (whatever it is), you may end up with 100% coverage by having both plans.

If a person only has a HDHP plan (or plans), then you look at the HSA rules. I don't have the dollar limits handy. But, you look at the first individual. If he/she only has individual coverage, you base the HSA limit on the deductible (using the lower deductibe of the 2 policies). If he/she has family coverage, then you use the deductible under that policy. But, that higher limit must be split among the family members. They can split it however they want - but the total HSA contributions as a family can't be more than the deductible under the HDHP (or if less, the applicable HSA dollar limitation).

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Please, I'd like input...currently have an employer health insurance plan WITH supplementary savings plan (optional, but we take part in it).

Total costs for insurance, including dental, for our family - 400.00 monthly, plus withdrawals to equal $3000.00 annually in pre-tax dollars for the supplemental plan. We can not roll any unused dollars into the next year. Insurance covers 80% of all medical costs and 100% of routine screenings and checkups.

I am wondering if a HSA might be better since we could roll any unused money into the next year - tax-free. However, this would be after tax income. Also, we'd have to pay 100% of our medical costs till the deductable was met. Help, I'm confused!

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Going back to the original question of 2 HDHPs and one HSA.

Would this scenario be kosher?

Plan A is a family plan with an HSA, a $10,000 deductible, $50,000 of annual benefits and a $1million lifetime maximum.

Plan B has the same features without an HSA.

Plan A is primary, plan B is secondary.

Don Levit

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