HSA Partial Year Employee Contributions

[Bcompliance2003]

The employer's HSA plan starts September 1, 2023.  Can an employee contribute the maximum allowed HSA contribution for 2023 and 2024? 

[Lynne P]

The HSA annual limit is pro-rated monthly - each month you are enrolled in an HDHP (single or family) determines your maximum contribution for the CY. 

Employees who were enrolled in an HDHP for all 12 months in the calendar year (CY) can contribute the CY maximum.  If they first enroll on 9/1, they can contribute 4/12ths of the CY maximum.

There is one exception -- if you enroll mid-year and are enrolled on 12/1, you can contribute the CY maximum for that calendar year but you must stay enrolled through the next CY (called the testing period) or you owe taxes/penalties on the excess contributions.