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Hi, I'm looking for some guidance on how to unravel a mess we've created with adding both an FSA and HSA for 2023. My wife started a new job with her own healthcare coverage and added an FSA with $250 for 2023. I have a HSA maxed at $3850 and partly paid by my employer. She didn't realize this would create a problem with having both FSA and HSA in the same year and it's too late now to change the plans. I found an older post here from 2009 and wanted to confirm that the advice was still current. The post says to suspend contributions to the HSA and to spend down the FSA asap. Once the FSA is empty, restart the HSA contributions and I can then contribute up to the annual amount. I'm also seeing conflicting posts that say FSA coverage applies to the whole year regardless of whether it's spent down so disqualifies HSA contributions for the whole year. It also doesn't say if there are penalties or what to do with any money contributed to the HSA. What happens to this money? Does it need to be removed from the HSA and/or taxed at the end of the year? Can I continue with contributions to the HSA and just pay the tax? I also found a post about the possibility that her FSA may include a clause where "the spouse can elect that the money in the FSA can only be used by family members not covered by the HSA" so checking that out. I'm looking for any help on what to do next. Any suggestions would be appreciated.

I am looking for some guidance on the following scenario please. In January 2023 an HSA account holder intended to contribute x amount toward the 2022 tax year. Howeever, in error, he contributed the funds toward the 2023 tax year. In February 2023 all funds are transferred to a new HSA trustee in a trustee-to-trustee transfer. In March the account holder realizes the error and requests to have the January contribution recoded as a 2022 contribution. What obligation does the new trustee have to make this correction? How will this correction affect the trustee's 5498-SA filing?

I have became aware of recent bulletins from the insurance regulators in several states that appear to require health insurers to cover treatment (and testing) related to monkeypox without cost-sharing during the public health emergency (PHE) declared by the federal government for monkeypox. I am not aware that the federal PHE declaration for monkeypox requires insurers to cover testing and treatment for monkeypox, so this appears to be an action initiated by state regulators. Unfortunately, some of these bulletins provide no exception for HSA-qualified plans so I'm concerned that both bulletins are problematic for HSA account owners with state-regulated HDHPs. Has anyone else come across these situations? CA All Plan Letter 22-019 - Health Plan Coverage of Monkeypox Testing, Vaccinations, and Therapeutics.pdf NM Bulletin 2022-17 Monkeypox PHE.pdf

Employee opts out of medical coverage for 2017 but elects general purpose health FSA coverage during open enrollment because he is covered under spouse's plan. Spouse terminates employment mid-year. Due to the change in status, the employee enrolls himself and spouse under employer's HDHP starting June 1 and wants to contribute to HSA starting then. Employee has exhausted health FSA balance. Can employee terminate FSA effective May 31 and start contributing to an HSA thereafter? I think not but cannot seem to find support either way. Any help is appreciated,

Does anyone know of a site similar to BenefitsLink that solely focuses on PBMs and Rx plans?

Hi- I am at the point I am going to need to take a $8000 401k hardship withdrawal to pay medical bills. I will be paying a penalty and taxes on this My question is, can I then deposit the money into my HSA account and reimburse myself tax free for these medical expenses?

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.

A client's employee is going through a divorce, and HSA assets were divided. The former spouse set up a new HSA to receive her share of the funds and to make future contributions. The employee is being told by the bank that holds his HSA has said that they will only issue a check to the former spouse directly, and not to the institution where she has set up her new HSA. Does anyone have any specific guidance on this issue? Thanks in advance.

The IRS sets FSA and HSA limits based on calendar year. Our benefit year is 10/1 to 9/30. Can we setup our plans so the limits follow the benefit year rather than the calendar year? I've not seen this done but have been told that our legal department has approved this process so long as we stay consistent.

Client company adopted a QSEHRA. Participants will purchase individual HDHP insurance policies and be reimbursed by QSEHRA. May the company make direct HSA deposits on behalf of employees? (If employees make deposits, the amount is deductible on form 1040 but subject to FICA taxes.) Is there a way for the company to make the deposits so that the company "does not offer a group health plan to any of its employees" and violate IRC 9831(d)(3)(B)(ii)?

I represent a company that has an HDHP and HSA for employees. Due to a TPA error, several HDHP and HSA participants who had not yet reached their HDHP deductible were designated as though they had. Because of this designation, said participants began receiving reimbursements from the HDHP. Obviously, this would make said participants ineligible for an HSA since they are being covered by another medical plan before reaching their deductible. Is there a way for the affected participants to pay back the reimbursement monies paid by the HDHP so they could once again become HSA eligible? To further clarify, this has all happened within the 2017 calendar year.

I am trying to understand the comparability rules for HSAs, particularly as they apply to former employees and have some pretty basic questions. Under the Final Comparability Regulations for HSAs CFR § 54.4980 Section 1-7, employer contributions to an HSA are not subject to comparability testing if the contributions are made through a cafeteria plan “if under the written cafeteria plan, the employees have the right to elect to receive cash or other taxable benefits in lieu of all or a portion of an HSA contribution (meaning that all or a portion of the HSA contributions are available as pre-tax salary reduction amounts), regardless of whether an employee actually elects to contribute any amount to the HSA by salary reduction,” and they are subject to the comparability rules if made outside of a cafeteria plan. (54.4980G-5, Q&A-1) My first question is whether HSAs are ever not offered through a cafeteria plan? This is not the relevant question, but I would like to know if that ever happens. Former employees may receive contributions from their former employers, and former employees are a category that must be tested under the comparability rules if they apply. (a) Categories. The categories of employees for comparability testing are as follows … (3) Former employees (except for former employees with coverage under the employer's HDHP because of an election under a COBRA continuation provision (as defined in section 9832(d)(1)). (54.4980G-3, Q&A-5) Also, “An employer that contributes only to the HSAs of former employees who are eligible individuals with coverage under the employer's HDHP is not required to make comparable contributions to the HSAs of former employees who are eligible individuals with coverage under the employer's HDHP because of an election under a COBRA continuation provision (as defined in section 9832(d)(1)). (54.4980G-3, Q&A-12). Am I correct that if the HDHP is a retiree plan, the comparability rules apply and if elected through COBRA, they do not apply? So, subject only to discrimination testing, the employer can choose to make HSA contributions of differing amounts or only to some but not all former employees under COBRA? Finally, is there any limit as to how long employers can continue to make contributions to former employees, either under COBRA or the comparability rules?

I have been contributing the family maximum to my HSA for the last 4 years and have seen the account grow significantly. My intention is to avoid dispersements as long as I can to build up enough pretax money in the account to be used in my later years to either bridge the Medicare gap for early retirement or pay for supplemental insurance once I reach Medicare age. Currently, my Wife and last eligible child is on my HDHP plan. Our contribution to the HSA is directly deducted from my paycheck. We file our taxes jointly. My son is not a dependent on my tax return but is eligible for my health insurance until he is 26 yrs old. Questions: 1. If my wife takes another job and is signed into another health plan and off of mine, can I still use the money we contributed as a family to the HSA to cover any of her healthcare expenses going forward? 2. If my eligible child signs into another healthcare plan but it does not cover dental or vision, can I use my HSA account for any of his expenses? 3. If I pass away before my wife and there is still money in my HSA, can she use the money for her medical expenses or the does the HSA have to be dispersed and taxed to the estate? Any info would be helpful.

Someone outside of my organization presented this question and am trying to help. The company contributes to an Health Savings Account (HSA) for its retirees. The retirees are not paid on their payroll system and do not receive a W2. A 3rd party processes the payments and produces a 1099 for the retiree payments. The questions are: 1. How will this contribution reported to the retirees? The information should be included on the HSA administrators statement to employees. 2. Do they need to create a W2 which reports only the Employer contribution to the HSA in Box 12W? The employer contribution is not taxable to these employees, as they are not located in any state which taxes employer HSA contributions. Your guidance and assistance is appreciated.

I got married recently on the 25th of February, 2017. My wife has a non-limited FSA with her employer. I have an HSA/HDHP with my employer. I'm looking to move her over to my employer's health plan. Her employer is willing to retroactively cancel her health insurance and FSA on the 28th of February. I can enroll her on my company's plan which is effective immediately. She wouldn't have any overlap in FSA/HSA contributions. Would this be fine? Also, if we went forward with this plan would we be constrained in terms of our HSA contributions?

My employer is merging with another company and our benefits are to be terminated soon and then picked up by the different benefit providers by the new company. I currently have an FSA and the other employer's most attractive medical plan is the HDHP with the HSA. I believe my FSA at my current company is subject to use it or lose it when my job officially terminates. I won't have enough medical expenses to use up hardly any of my FSA at the moment since this is occurring in January, but I'd like to contribute to a pre-tax health savings account this year, as I'll need it eventually. When my FSA terminates, I'm assuming I'll forego any funds that are left in the balance of my FSA, but am I able to enroll in the HDHP with the new company and begin contributing to an HSA?

We are an organization that offers health insurance to all of our employees, paying all or almost all of the employee only premium options and not contributing very much additional premium for family, children and spousal levels. We also provide $140 a month in HSA employer contribution to the employees who elect our HDP (HSA eligible plan). Essentially, we pass the cost savings of the lower premiums on to our employees through this contribution. The HSA plan is part of our Section 125 plan. We have one employee who can be much better off financially to obtain a HDP for his wife and himself on his own, directly from an insurance carrier (even considering his premiums will now be post tax). Our HSA administrator will not allow him to participate in our Section 125 HSA payroll deductions and therefore will not allow him to receive the $140 a month in employer HSA contributions. They claim this is because they have no way of confirming his actual eligibility regarding participation in an HSA account. Our question is whether or not we can make a $140 contribution directly to his HSA account and what the ramifications of that would be. We know that Employer Contributions without a Section 125 Plan are allowable (assuming comparability rules are met, etc.). Having said that, we wonder if, by having a HSA as part of a Section 125 Plan, we are precluded from also have HSA Contributions that do not relate to the Section 125 Plan. We would make this opportunity available to all employees (all who participate in a different HDP plan would be able to receive the contribution) and in the same monthly amount as those inside the Section 125 Plan (both sides would receive the $140). It seems silly to force the employee to pick an employee plan with us and an individual spouse plan with the insurance company just so that he can get our $140 a month, something that will happen in this case and cost our company a lot more money. Any thoughts would be appreciated.

An employer is going to offer an HDHP (in addition to their “regular” health insurance plan) to employees, and will add an HSA to their cafeteria plan at the beginning of the year. (The health FSA will be limited for those participants with an HSA.) Can the employer contribute $100 per month to ONLY the employees’ HSAs that elect the single coverage HDHP, and pass nondiscrimination testing? It is my understanding it should pass the eligibility and availability tests. Further, in order to test for BOTH the utilization and the 25% key concentration test, BOTH employee pre-tax salary reduction contributions and the employer contributions will be added together and tested for both of these tests? And further, there is no nondiscrimination test that requires the employer contribution to just be considered alone?

We have an employee that contributed to his HSA after he signed up for Medicare. We have requested the return of the excess contribution. When we receive the funds back, we will pay him and withhold the proper taxes. I don't know what I need to do in Box 12 of his W-2 since the contributions will show up there. All of this has or will be done in the same tax year.

My wife and I dropped our health insurance through our employers after we retired and opened a High Deductible health insurance policy which qualified us to open an HSA. We opened the HSA in September, 2013. This November, my part-time employer is making me full-time and this new status will provide healthcare for my wife and I for less than we are paying for our High Deductible insurance but of course it is not an HD account nor does it qualify as a high-deductible account. What are the repercussions for my HSA which has the maximum allowed tax-free deposit made to it (I rolled over my traditional IRA into it) for both my wife and I? We will have had this account for less than 3 months when the switch occurs.

I have more medical expenses than my budget can handle and I'm considering taking a hardship withdrawal from my 401k. For tax purposes, would it be possible to deposit the money directly into my HSA? I haven't found anything online that says yes or no either way.