Rick S

Thx Spiritrider for the detail behind your earlier posts! Rick S

QDROphile-- Thank you for your input! Rick S

QDROphile-- I am intrigued and somewhat confused by your post above. Are you saying that both parents (unmarried in this case with one child) are not allowed by law to cover their child with two separate family HDHP's by two different employers for the same child-- or are you saying that the law does not specify this scenario and by its absence or lack of specificity folks can cover their child with two separate HDHP plans if it makes sense for their situation?? Please provide some context when you can. Thank you, Rick S

Spiritrider- Thank you--I appreciate your knowledge and expertise!! Rick S

Spiritrider and others-- Your reply above got me to thinking--- If it made sense financially -- could both parents (not married) with separate HDHPs actually sign up for a family plan (i.e. the child would be on both parents HDHPs) and each contribute $7,000 to their respective HSA for 2019. In addition to the upfront family HSA tax deduction for both parents, the objective here would be to grow each HSA as much as possible (not use the HSA funds until much later in life) and pay for health expenses out of pocket until they are on Medicare. In your earlier answer to me-- I assume if the child's healthcare expenses were reimbursed using one of the parents family HSA's it would be only allowed for the parent that claimed the child as a dependent on their tax return. Thanks for your help. Rick S

Spiritrider-- I appreciate your expertise on this subject and thank you for a quick response. Many thanks! Rick S

Based on the work/life scenario listed below--- I was wondering what the maximum HSA contribution would be for both individuals for 2018. They both have separate HDHP's. My daughter and her fiancé have a child together (1 year old ) but are not married. They live and share a home (rental) together. She is claiming the child as a dependent because her income is well below $200,000 and she will be able to file as head of household and also will receive the full child tax credit of $2,000. She had a HSA (self only) for the entire year and contributed $3,450 this year. She is 39 years old. Her fiancé makes too much income to receive the child tax credit but has the child on his health insurance because the health facility/doctor choices are a little better. He will file as single for tax purposes. He also has a HSA for 2018 and contributed $3,450 (self only). He is also 39 years old. My question is: Are they maximizing their contributions to each HSA and can he actually have a family HSA because the child is on his medical plan and contribute to his HSA as a family plan ($6900)? Any guidance is much appreciated. Thank you, Rick S.

Xtitan--Sorry for the delay in replying to your message from last Friday. I appreciate the detail on a possible approach with the employer correcting /modifying the final paycheck. Rick S

Thank you Luke Bailey and XTitan for your responses. I really appreciate the feedback. I will go back and quote as you stated from IRC 457(f)(1) to see if I can determine why they wanted to have the 457 (f) plan be post tax dollars---but I'm not hopeful things will change. At a very high level, for 2018, the incremental tax increase (deducting the $6,000 457 (f) income from gross income versus keeping it in gross income) will probably result in about $265 extra we will pay in Federal taxes which means they did not withhold enough federal taxes from the 457 (f) contribution. Also, one thing it could impact eventually (I am on Social Security so I need to talk with Social Security) is Medicare part b premiums. As you may be aware, your premium for part b is based on your modified adjusted gross income and we will be close to this $6,000 pushing us into a higher premium bracket. If so, it may result in an additional $80 per month premium whenever they look at 2018 earnings. I also think we take a little hit on the Medicare Excise Tax (.09%) in 2018 (unless it was eliminated due to the Tax Act) for the extra $6,000 since we are over the $250,000 for married couples filing jointly. XTitan-- We are located in New Hampshire so thankfully individual State taxes do not apply. Thank you again for your help! Rick S.

With respect to my Wife's 457 (f) plan, she emailed the employer and stated that her 457 (f) quarterly contribution should be pretax and not post tax (Federal, Medicare and FICA were deducted) and by taxing these contributions, the SRF has been met. This is the response back from the employer--- Given the description you outlined, we felt it was important to conduct some additional due diligence and we have been advised that, with respect to the employer rather than employee contributions, the employer can establish the tax treatment of the benefit under the plan’s terms. The plan provides that the employer amounts will be contributed on an after-tax basis. Although you are forfeiting the benefit in connection with your termination, we believe the amounts already withheld on the contributions should cover your income tax liability. If you have further questions about this or believe you will have some income tax liability, please let me know. Does anyone know if the employer can tax a 457 (f) contribution upfront and then deposit the remaining money into a 457 (f) account only to state that the SRF conditions will not be met? By the way, their 457(f) plan literature clearly states taxes will be withheld and the remaining money deposited into a 457(f) account. Any feedback is appreciated. Thank you, Rick

Spiritrider, I wanted to reply based on the comments regarding ---" Your HSA eligibility ends up to six months before your Medicare enrollment" Should I be concerned with this statement? As I mentioned with my initial question ---"How much can my wife and I contribute to an HSA based on her remaining on a HDHP (for entire year of 2018) and me enrolling in medicare effective 8/1/2018, ending my HDHP coverage 7/31/2018" To date I (not my employer) have contributed $645 on a monthly basis to my HSA which will amount to $4,515 (after my July 2018 contribution) $645 x 7= $4515. Also, based on your analysis and laying out the numbers, my wife will contribute as much as $2,530.83 to her HSA sometime during 2018 --most likely as a single one-time contribution. Am I still okay --based on " Your HSA eligibility ends up to six months before your Medicare enrollment" Should I be concerned with this statement? Thanks for your help! Rick S. .

Kac1214, Thank you for the timely advise on delayed enrollment in Medicare. I appreciate the education. Rick S.

Patricia and XTitan, I appreciate the confirmation and feedback. My wife has just sent a letter to HR with much of the information everyone has provided. Thank you all for helping me sort through this issue. Rick S.

Luke Bailey, I appreciate your input and expertise regarding 457 (f's). Yes, she will easily exceed the FICA income limit with the 457 (f) income counted (or not counted) as income. I'm not certain I understand your statement "Of course, your wife got the benefit of $3,000 or so in federal income tax withholding.........." I just don't fully comprehend the benefit of having extra gross income in your year end W-2 without the benefit of receiving the net income after taxes (Federal, Social Security, Medicare). We live and work in a state that does not tax income. As a next step, would you suggest my wife have a discussion with her HR department to see if they will remove this 457 (f) income from her year-end paystub and w-2? I am also assuming the employer (not the employee) needs to issue a W-2c if a W2 has already been issued? Thank you for your help! Rick S.

Spiritrider, I appreciate your effort in explaining this to me. It does make sense when you lay it all out with the numbers. Thank you so much for the help! Rick S

SpiritRider, This is great information. Thank you! One item that I think may change the calculations ??--- Effective August 1, 2018 I will go on Medicare and will not be on the HDHP. I will have Medicare Part A and B and a Medicare supplemental plan. I also will have my own dental and vision coverage. My wife will still be on the HDHP but I'm assuming that since she is the only one on the plan effective August 1, 2018, does it not convert over to a single person HDHP and therefore her HSA contribution would somehow be decreased from your calculation above? Would her contribution calculated above change if we have a family HDHP plan for 7 months (both her and me) and then a single HDHP plan for 5 months (just her) when I go on Medicare (August 1, 2018). I really appreciate your reply and insight! Thanks again-- Rick S

Thanks Madison 71, I was trying to determine the maximum amount my wife and I could contribute to our HSA's in 2018. I know as a family HDHP, the maximum HSA contribution should be $6,900 plus $1,000 for being over 55 for a total of $7,900. I will have contributed $4,500 for this year (by the end of July 2018) to my HSA and then I go on Medicare, effective August 1, 2018 and my HSA contributions end. My wife does not have a HSA at the present time. I do know that my wife can open a HSA and contribute to her own HSA but since I have been contributing to my HSA as a (family HDHP plan), I am stumped how much my wife can actually contribute to her HSA (when she opens one up) after August 2018. For 2018, it seems very muddy to me with respect to maximizing contributions. In 2019, it should be much simpler since she will be on a HDHP for the full year as a single individual and will be under 65. Thank you, Rick S

My wife and I have a HDHP with my former employer and contribute to a family HSA. We are both on the same HDHP (not individual plans) and would like to max out our yearly HSA contribution. I will be on Medicare effective August 1, 2018 when I turn 65 but my wife will remain on the HDHP, since she is 63. At the end of July, 2018, I anticipate to contribute $4500 to my HSA. My wife does not have an individual HSA. I would like her to open her own HSA in 2018 but I'm not sure how much she can contribute since I will have contributed $4500 this year before going on Medicare. My wife will also be on the HDHP all of 2019 if this info helps. Does anyone know how to calculate the maximum HSA contribution given the above information? I don't see a similar scenario as above in IRS Publ 969. Thank you for your help. Rick S

I appreciate the feedback. The somewhat good news is these quarterly contributions will be only for this year (2018). So the hospital will not have to issue any corrected W2's for previous years. Does anyone know if the employer (Hospital) is required (legally) to adjust the W2 since they have included this as taxed income that will be forfeited because of not meeting the SRF conditions? Or do I need to adjust the w2 income somehow when I file taxes with one of the on line tax programs(turbotax or taxact)? Or are we just or are we just out of luck if the employer will not adjust the W2 for 2018. Thanks for all of your help! Rick S

My wife has a 457(F) plan with a hospital in which her employer contributes $3,000 per quarter or $12,000 per year. However, each $3000 quarterly contribution is taxed (Federal, FICA, etc) -- it shows up as a separate paycheck with applicable tax deductions -- and the remaining amount (around $2000) is then deposited into a deferred account that grows tax free until it is distributed at a later date based on SRF conditions. As we understand, the SRF conditions are staying employed with the hospital for 3 years or meeting a retirement age of 65. Her HR Benefits department has stated that their 457(F) plan is unique in that it taxes the $3,000 quarterly contribution upfront. She will be leaving her job and will not meet the SRF conditions so she will loose all of the contributions that are in this deferred account. Since the $3,000 quarterly contributions are in her paycheck, taxes deducted, and eventually her W2 as income, should these contributions be deducted by her employer from her income and her W2 adjusted since she will forfeit these contributions? Any thoughts or guidance is much appreciated. Thank you, Rick S