Tweet
Open enrollment tax-related HSA/FSA question. The amounts here are not trivial (1-2K a year), so I appreciate your help & input. I will ask similar questions to our benefits office, but it is always nice to get a "second opinion", even if crowd-sourced. FYI -- I understand the basic tax treatment of the accounts, it's more about the arrangements, ability to switch & what's permissible.
Background: for this year, my wife & I both have individual plans. I have a low-cost, high deductible plan with FSA (no HSA option allowed), my wife had a high deductible with HSA. Premiums for individual high deductible plans were low & made more sense than buying a family plan. Goal was to squirrel away all HSA funds, and use FSA for any expenses. We were banking on being healthy, getting away with low monthly premiums, and keeping 1 of 2 HSA accounts with max individual contribution.
It didn't exactly work out this way (my wife got sick), but w/o hindsight, I still would have made the same choice.
This coming year is a bit more complicated -- we are planning to start a family, so we (potentially) have a qualifying event, but also potentially (more likely than not) not insignificant medical expenses, such as physical therapy & fertility workup/treatments.
So down to specifics:
(1) With a married couple, can you have one person with FSA and another person with HSA individual plans? Are we then obligated to file taxes as married, but filing separately, or are we OK with married joint file?
(2) I understand one cannot be covered by FSA and HSA at the same time. Does that mean one cannot have FSA and HSA in the same year, even if switching plans due to a qualifying life event (birth of child, change in employment, etc)?
(3) Contributions to HSA -- I understand that as long as one is covered by HSA at the end of the calendar year, one can contribute up to the max in the HSA (for 2018 3450$ individual, or 6900$ family).
So referencing question #2, if one has an individual high deductible plan with an FSA, does that mean one is forbidden from switching into a family-coverage HSA, or just that if one switches into family coverage HSA, one cannot contribute to the family max, but only to individual max?
(4) Conversely, if one has a HSA high deductible individual plan, but switches into family non-high deductible (non-HSA) plan and is on that plan at the end of the calendar year mean he/she cannot contribute to HSA?
Sorry to make this so convoluted. Basically, our options are: (a) keep status quo with two individual high deductible plans (one HSA and one FSA), but risk incurring high medical costs (b) family plan high higher monthly deductibles, that reduces risk of high medical costs, but also no tax-savings if we are healthy and wind up not using our medical coverage enough or (c) some combination thereof, where we can have our cake and eat it too, with switch due to qualified life event.
Background: for this year, my wife & I both have individual plans. I have a low-cost, high deductible plan with FSA (no HSA option allowed), my wife had a high deductible with HSA. Premiums for individual high deductible plans were low & made more sense than buying a family plan. Goal was to squirrel away all HSA funds, and use FSA for any expenses. We were banking on being healthy, getting away with low monthly premiums, and keeping 1 of 2 HSA accounts with max individual contribution.
It didn't exactly work out this way (my wife got sick), but w/o hindsight, I still would have made the same choice.
This coming year is a bit more complicated -- we are planning to start a family, so we (potentially) have a qualifying event, but also potentially (more likely than not) not insignificant medical expenses, such as physical therapy & fertility workup/treatments.
So down to specifics:
(1) With a married couple, can you have one person with FSA and another person with HSA individual plans? Are we then obligated to file taxes as married, but filing separately, or are we OK with married joint file?
(2) I understand one cannot be covered by FSA and HSA at the same time. Does that mean one cannot have FSA and HSA in the same year, even if switching plans due to a qualifying life event (birth of child, change in employment, etc)?
(3) Contributions to HSA -- I understand that as long as one is covered by HSA at the end of the calendar year, one can contribute up to the max in the HSA (for 2018 3450$ individual, or 6900$ family).
So referencing question #2, if one has an individual high deductible plan with an FSA, does that mean one is forbidden from switching into a family-coverage HSA, or just that if one switches into family coverage HSA, one cannot contribute to the family max, but only to individual max?
(4) Conversely, if one has a HSA high deductible individual plan, but switches into family non-high deductible (non-HSA) plan and is on that plan at the end of the calendar year mean he/she cannot contribute to HSA?
Sorry to make this so convoluted. Basically, our options are: (a) keep status quo with two individual high deductible plans (one HSA and one FSA), but risk incurring high medical costs (b) family plan high higher monthly deductibles, that reduces risk of high medical costs, but also no tax-savings if we are healthy and wind up not using our medical coverage enough or (c) some combination thereof, where we can have our cake and eat it too, with switch due to qualified life event.
Comment