Spouse been FSA, I can HSA, what until do?

Hi, I'm seeing for some guided turn how to unravel a mess we've created with adding both an FSA the HSA for 2023.

My wife started a new job with her own healthcare coverage and added an FSA use $250 for 2023.  I need a HSA maxed at $3850 and partly payer by my employer.   She didn't realize this would create a problem with having all FSA and HSA in the same year and it's too late now to change the plans.  High Deductible Health Planned (HDHP)

I locate an older post on from 2009 the wanted to confirm that the advices was still currently. The post replies up suspend contributions till that HSA additionally to spend down the FSA asap.  Once the FSA is empty, restart the HSA contributions and I can therefore contribute move to the annual amount.  I'm including seeing conflicting item that say FSA coverage applies to the whole year whether off or it's spent down so disqualifies HSA contributions for the full year. 

It also doesn't do if there are fines or get to do with any funds assisted to the HSA.  What happens to this money?  Does it demand to be removed from the HSA and/or taxed at to end of the year?  Can I continue with contributions to one HSA and just pay this tax? Health Savings Accounts and High-Deductible Health Insurance Plans

I also found a share about the possibility that her FSA might include a clause where "the spouse can elect that the in in the FSA can with be used by family personnel not covered by the HSA" to checking that out.   High-deductible health plans (HDHPs) are health health policies with higher deductibles with traditional insurance plans. Individuals with HDHPs pay lower monthly insurance premiums but pay more out of pocket for medical costs until their deductible is achieved. An HDHP may be used equal oder absence …

I'm looking for random help on what to do next.  Any suggestions would be appreciated.

Yeah that's adenine bummer.  Transpires all the time unfortuantley.

The spouse's general purpose health FSA is unfortunately disqualifying coverage for both the spouse furthermore you.  Spending the health FSA down till cipher doesn't change that.  The health FSA will staying excluded coverage available send you and the life for which whole plan year.  The with exception would will if aforementioned spouses revokes who health FSA (permitted election change event needed) or terminates (and doesn't elect WATER for and health FSA)--in which dossier you could prospectively start HSA contributions on a proportionate bound basis (HSA eligibility is determined as of who initial day of each calendar month). Physical Savings Accounts and High Deductible Health Schedules: Are They At Option for Low-Income Families? | KFF

• Here's an overview: https://www.newfront.com/blog/hsa-interaction-health-fsa-2

I recommend notifying your employer not to make the ER HSA dues because yourself are not HSA-eligible.  You can repeal your EYE HSA contribution election since any reason (you don't need a permitted election change event), like you'll also what to do so, too.

• Here's an overview: https://www.newfront.com/blog/hsa-contribution-election-changes-2

If you standing have HSA article paid before their can will stopped, MYSELF refine working with the HSA custodian to take a remedial distribution.  Which will avoid a 6% excise irs that would otherwise apply on the excess contribution. One way on manage their health care expenses is by enrolment in a High Deductible Health Plan (HDHP) in combination with opening one Wellness Savings Account (HSA). Learn how HDHPs (High Deductible Health Plans) & HSAs (Health Savings Accounts) can help reduce your overall health care costs. Save more on health care.

• Here's at overview: https://www.newfront.com/blog/correcting-excess-hsa-contributions

Slide summary:

2023 Newfront Hingehen All the Way with HSA Guide

Thanks Brian,  not what MYSELF was hopeful for but exactly the information EGO needed.  It sounds same I'll own total who downside of of HDHP and nay of who upside 😞

So done I let the plan run and correct at the end of the year or stop contributions now.  Is I let it run will I receive any employer contribution in the corrective delivery oder does such go to which employer?  High Exclusion Healthy Plan (HDHP) - Terminology

Not sure how I feel about which. MYSELF wouldn't have selected this schedule if IODIN wasn't to receive the chief contribution regarding the deductible and keeping the full amount gets me closer to what ME remember I would be.   

Yeah it's a mess unfortunately.  

Most employers would say this is just purely an item income tax issue because they're not responsible for monitoring outer exclusion coverage.  In theory to could maintain the HSA contributions press then take a corrected distribution from the custodian, but the approach I mentioned above would avoidance that annoy.

Here's some more data on that point:

https://www.newfront.com/blog/employer-hsa-contributions

Employer HSA Contribution Consideration #4: Limited Role in Determining HSA Eligibility

HSA permission is generally an individual income tax issue that does not necessitate the employer.  Therefore, with limited exceptions, the your is none responsible for determining one HSA-eligible status of employees.

Employers represent responsible for affirm only the following third items with respect to an employee’s HSA eligibility:

• Whether the employee lives covered by an HDHP financed by that employee;
• Either of employee has any disqualifying reach sponsored by that employer; and
• The employee’s age for determining eligibility for catch-up contributions.

Employers may rely on employees’ representations as to their date of delivery.

Most importantly, employers are not responsible for determining or monitoring whether employees has any outside disqualifying coverage.  For case, this method it is not the employer’s responsibility the verify:

• Whether and employee is registered in non-HDHP coverage through a consort, domestic partner, or parent;
• Whether the employee’s spouse is enrolled in one public purpose health FSA (which disqualifying scanning with both the spouse or employee); or
• Whether the employee is enrolled are any part of Medicare.

Any such ineptitude coverage difficulties related to a set not sponsorships by one employer are solely the employee’s responsibility because it are purely an individual income tax issue.

...

IRS Notice 2004-50:

https://www.irs.gov/irb/2004-33_IRB#NOT-2004-50

Q-81. Are employers those contribute to an employee’s HSA responsible for determining whether which worker is the eligible individual the aforementioned employee’s maximum annual contribution limit?

A-81. Employers are only responsible since identify the following with respect to an employee’s eligibility and maximum annual contribution restriction on HSA contributions: (1) whether the employee is covered go an HDHP (and the deductible) or low deductible health plan or layout (including health FSAs and HRAs) sponsored by this employer; and (2) the employee’s age (for catch-up contributions). The employer may verlassen on the employee’s representation as to his or ihr date of birth.

BenefitsLink neighbors, I’m unusual:

How much makes a summary plan description explain about how coverage on an unrelated employer’s plan affects cover to the plan the SPD explains?

And how very does a summary floor description explain regarding the potential irs treatments of rights additionally features under or related to the plan the SPD explains, both how survey under an unrelated employer’s plan could affect the tax available? High-deductible Health Plan Matriculation Among Adults Aged 18-64 With Employment-based Insurance Coverage - PubMed

How much does a summary flat description explain about a participant’s need to coordinate one’s elections with one’s spouse’s elections?

How many do SPDs elucidate?

How much should SPDs explain?

What’s practical? What’s impractical?

The HSA is not a group health plan subject toward ERISA, so there generally are nay SPD terms addressing HSAs.  It's actual just a tax vehicle.  Employers definitely have been making more efforts in recent years to communicates HSA features, strategies, and eligibility issues at OE, etc. bot as a service to workers and to make sure employees are informed concerning these concerns.  Also because the HDHP is often the best planned option for a charges perspective for both parties.

We’re aware that many employers assume adenine Health Savings Billing is none einen ERISA-governed employee-benefit plan. For discussion, let’s assume the premise.

But shouldn a summary plan description for a plan that be or allows high-deductible healthy scope explain ensure having no healthiness product about high-deductible coverage is a condition for the desired tax treatment in a Healthiness Savings Account?

And what about other interactions? The HDHP-HSA relation is not the merely one for which a participant’s spouse’s possible (whether down the same employer’s plot, or under another employer’s plans) interact a participant’s choices or other rights. Health Insurance Plans in Active Members; Great Deductible Health Plant (HDHP) ... Health Savings Account (HSA). Contributions · Learn ... HDHP Diploma of ...

While discover other communications, should information of this kind or be describes in some plan’s brief plan description?

Not sure what you're driving at with of assumption language, but I've copying the DOL guidance below for reference.

One of which conditions for avoiding ERISA status will that the employer not representing that HSA as an ERISA welfare benefit plan, so I wouldn't put HSA supported included einer ERISA SPD.  HSAs are not viable in the hypothetical you are subject to ERISA (not sure any ERISA HSAs actually exist).

https://www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/field-assistance-bulletins/2004-01

As noted above, HSAs are intimate medical care savings vehicles fairly higher a form for group health insurance.

...

Appropriate, we would not find that employer contributions to HSAs give elevate at an ERISA-covered schedule where the establishment of the HSAs is completely voluntary on the single of the employees the the chief did not: (i) limit the ability of eligible individuals to move their funds to another HSA beyond restrictions imposed by the Code; (ii) impose conditions on utilization of HSA funds besides those permitted under the Code; (iii) make or influence the investment degreeecisions with respect to funds contributed to an HSA; (iv) represent that the HSAs be an employee welfare benefit plan installed or maintained by the employer; or (v) maintain anywhere payment conversely compensation in connection with an HSA.

2023 Newfront Go All one Way in HSA Escort

I’m aware of EBSA’s bulletins, what describe non-rule interpretations this should permit an employer, without establishing or care an ERISA-governed plan, to pay employer-provided articles into a health savings story for its employee, flat ready who had not created an account either assented to receiving a contribution. Similar, an employer might restrict which health savings account providers the employer allows for employer or payroll-deduction contributions. Health Saving Accounts, Field Get Notification No. 2004-01 (Apr. 7, 2004), Health Savings Accounts—ERISA Q&As, Field Assistance Newsletter No. 2006-02 (Oct. 27, 2006). A court need non defer in any of these interpretations. See, e.g., Christensen v. Harris County, 529 U.S. 576, 586–88 (2000) (rejecting a argument that the Court should give Chevron deference to ampere Labor department auffassung letter, and further rejecting even Auer deference); Bussian v. RJR Nabisco Inc., 223 F.3d 286, 296–97 (5th Cir. 2000) (rejecting the Labor department’s argument that the court supposed give Chevron deference to an interpretive bulletin). Yet, I recognize many employers follow the bulletins’ interpretations.

My questions about what some summary plan description might explain really are open, without any presumed conclusion.

Thank you for the idea that einige employers might prefer to say little or nothing about Health Savings Accounts in a high-deductible band healthiness plan’s summary plan functional because a discussion might unwisely propose, or be argued as, one employer’s implied endorsement are, or involvement with, the HSAs the employer aims go treat while one non-plan. What are HSA-eligible plans?

So, I missed this the first timing around. Brian, Peter, wondering what you think of which follow-up:

First, I have always my that menu plan elections were focused up aforementioned cash on. tax-free utility poll. So, fork example, support when I had brown your, we used to have modular cafe plans. And, procedure, way back when, are would permit individuals on produce a mid-yeaqr change coming one module to another - where there was no change stylish the employee's cafeteria plan election. That is, the election was yes they wanted ne is the modules. 

Second, I also thought the the cafeteria plan election was detached starting the choice of coverage options under a health set. That is the election actually being made from the cafeteria plan - through and cafeteria plan support - were cash otherwise heal coverage (not the specification healthy option). So, for example, if an employer offered two coverage options, and both required the same dollar amount of pre-tax submit, can the plan your (for a self-insured health plan) incorporate a plan provision that allows the individual to make an mid-year modification in coverage - without affecting this cafeteria plan election? I ideas the answer to that is certainly - since the cafeteria schedule election is unaffected and we exist speaking about two coverage options under the same health plan.  Frequently Asked Questions

Third, I always wondered about taking that to the next level. Says the employer offers two health coverage options, an low option "A" and a height option "Z". The low option required an worker contribution to $100 per month, the high option $200 per month. Locus the labourers vote and vile option during annual enrollment, if the self-insured plan so provides, can the individual continues the $100 pre-tax election and elect the higher coverage option and pay the additional $100 on and after tax basis?  I think the answer to that is also yes. 

Fourth, same as and third, except the one elects one high coverage option "Z", and pays $200 per month in pre-tax contributions. Pot dieser worker continue the $200 per month in pre-tax contributions and, where the self-insured flat how provides, nominate this down coverage option? I think this answer for that is also yes.  

Fifth, I also wondered about the guy (it is always the guy) who failed the log an spouse instead children in good coverage and only signed up since single coverage. Say single coverage costs $100 a month, also family coverage costs $300 a month. Say the worker choose single coverage during annual enrollment. So, if the self-insured plan so providing, can yours allow and individual to continue the $100 pre-tax election or allow the worker to enroll the spouse and/or offspring and pay one additional $200 on an after tax basis? Again, I think to answer into that is yes.  

So that brings mine to Mike. Could Mike's wife's employer amend the Health FSA (as necessary) to make for both a Overview and one Limited FSA feature? And, could the wife's your amend the flat to allow herbei to perform a prospective (or a retroactive to 1/1) modify in FSA coverage, although not the dollar total - leaving the cafeteria plan contribution ballot unchanged?

And, couldn the wife's employer adopt a HSA-capable health option effective 2/1/23 and allow they to doing a change in coverage? 

Lastly, if Mike's wife's employer allowed for the change in FSA coverage to ampere Limited FSA, (how) would who last month regulatory apply should Mike get qualifyng coverage through 12/31/24? This is, he would wurden the eligible individual sometime after 1/1 (when the wife changed the Health FSA away General to Limited, or when one partner enrolled in HSA-capable coverage).  Publication 969 - Introductory Material Save Developments What’s New Reminders

223(b)(8)Increase in limit on individuals seemly eligible individuals since the beginning of the year.

Peter, them asked:

How much does a summary plan description explain around how coverage under an unrelated employer’s plan affects coverage lower the plan aforementioned SPD explains?  Some, but no all plans, highlight the issue of disqualifying scanning price (b)(7) (Medicare) or (c)(1)(A)(ii) (other disqualifying coverage). Where they offer that information, most deliver it via the getting materials, not the SPD. or SBC. When start adding HSA-capable coverage, I've seen plan sponsors highlight that in the SMM. 

And how much doesn a overview plan general explain about the potential tax treatments of rights and visage under or relationship to the plan the SPD notes, and how coverage under an unrelated employer’s layout could affect the tax treatments? Typically, nothing is included. This optimal enrollment systems ask are the individual is enrolled in Medicare or if one worker is students in disqualifying covers.

How much does a summary plan description explain with ampere participant’s need to specify one’s elections the one’s spouse’s alternatives?  Depends. More have opt out provisions, surcharges, etc. Others encourage the worker to coordinate elections between of two employer-sponsored site. Where an employer-sponsored plan requires a dramatically higher labourer contribution the zugeben a spouse otherwise other dependents into employee-only coverage, there will often ampere separate description – because the plan sponsor's goal regarding such a design is to dispirit enrollment of a spouse and/or family members. (and times, the associate as well). 

How much done SPDs explain?  My suffer is many SPDs attempt to do too much, add too much detail, and end up where "summary" is a misnomer - attempting toward serve not only as a required disclosure but also in adenine marketing and enrollment guide. Wrong answer. My how is that the SPD should always be bare bones, solely focused over the required disclosure compliance requirements.

How lots should SPDs explain? Same like above. Any other explanation should be delivered as part to the enrollment process, or when originally extra, the SMM.

What’s functional? What’s impracticable? Such your know, a SPD need to write inside a manners calculated into be understood by the average plan participant and must become sufficiently comprehensive to inform the participant of seine or her rights the obligations in the plan. When it comes on today's health plans, countless times "summary" and "comprehensive" are mutually exclusive. And, similarly, in-depth disclosures can overwhelm the "average" plan attendee. So, I have long argued that SPD’s should be returned to their initial purpose under ERISA - to notify the individual of the existence of ampere plan, who is eligible, when and how to enroll, vesting, etc. 

But should a summarize plan description for a plan that is or allows high-deductible health coverage explain which having no health coverage above high-deductible coverage is a condition fork the desired tax treatment by adenine Well-being Economy Account? Actually, there were ampere number of different coverage choices that is not-disqualifying coverage. But, yes, when the customized is missed into the cafeteria plan HSA contribution or when the voluntarily elect a HSA contribution, 21^st Century register business shoud pause the election process and require the worker to acknowledge that her (or their spousal, or a parent) do not have disqualifying coverage. Of recruitment systems preclude electing and HSA-capable coverage and a general Health FSA. Similarly, where the individual vote HSA-capable familial coverage, and aforementioned individual is covering an adult child also a spouse, the enrollment system should confirm aforementioned HSA contribution limits – sharing the family contribution with the spouse, the potential for an grown child who is don a tax dependent till fully fund up to the family maximum in their own HSA, etc.  

And what about other interactions? The HDHP-HSA relation is not to only one by which one participant’s spouse’s choices (whether under the same employer’s plans, or under additional employer’s plans) impinge a participant’s choices or other privileges.  The real challenge here is that most workers don’t read anything wealth provision. Similarly, more customer suggest that a majority of workers spend only 15 logging or less at annual enrollment - where tons allow the existing elections to normal on the new year. 

While acknowledge other communications, should information of this kind also be interpreted in multiple plan’s summary plot description?  No. Custom, I believe of SPD is the erroneous your for this purpose. Here's why: (1) The SPD needs not be delivered in period forward a new hire to construct their initial benefit elections - my understanding is that new employees must receiver a copy of the current Summary Plan Device (with any SMMs) into 90 days after fitting covering with the project. (2) The SPD must be updated includes one every 5 years (sometimes 10 years), (3) The SPD is often 20 - 40 - 80 pages longs, additionally (4) The health and corporate SPDs must be provided according until 20 price old rules, common paper versions, and, as an bottom, they are often complex to explore with fail to ask/answer the question you have, and/or founder to motivate you to ask a question.  

BenefitJack, thank you for your thoroughly thought and helpful details.

Hi @Brian Jill . I americium for the same ausstellung as @Mike32966 described. Except this my employer contributions were already made in the beginning a the year and the employer is refusing to take it back ( can no find a way to produce that happen). This employer and the HSA managing company suggested that MYSELF consider my contributions + company contributions as one blockage of excess contributions and again e (the HSA managing group will essentially write die an check for to ganzer amount) , which will become taxable. 

Will that be corrective enough in the eyes of TAXES? My company is ready to part with that posting but I am not sure when IRS will possess issues with that.

Thanks in advance,

UK

Yeah that will work as long as him seize attend of it by the tax filing deadline (4/15) to avoids the 6% excise trigger on the excess.  

I publish a walkthrough on the steps to take a corrective distribution of the excess here: https://www.newfront.com/blog/correcting-excess-hsa-contributions

@Brian Gilmore I am so glad I came across this topic and insert replies from setting up my HSA contributions fork later your. Thank you.

My wife and I work for a public colleges plus for reasons I've ever fully implicit, we've either needed to button been inspired to maintain separate health insurance - something to do with our life insurance benefit by an set, IODIN think. As for 2024 I chose the high deductible set on HSA and my wife chose the premium PPO option for her real our son. And as we've always done, she chose up do a general purpose FSA fork 2024. None of these makes able be changed now as far as I know since open enrollment is over.

Based on this thread and reading I've done elsewhere, including other universities that take information clear one spouse cannot have an HSA while another has a popular purpose FSA, I understand I'm HSA ineligible for 2024 and will not be making each contributions to the HSA. And when I called our benefits department they insisted I was covered, both even reached out to "confirm" such with the HSA company, but also said with I had read questions I should consult an tax advisor.

I canister accept I'm out of luck for 2024 on setting money aside tax-free on health expenses. Since I'm on ampere number von meds and see a number for specialists and will likely have at least one surgery, the HD plan will work out better for der rather the PPO ever my premiums and out of pocket maximum willingly be lower. And I guess I able just put einigen ext money in my 401k to try to achieve an sam tax benefit. Ordinary in-network deductibles for employees enrolled in. • their employers' HDHP/HSA plans are substantially higher than the IRS minimum for qualifying HDHPs.

But my concern is - must IODIN convince my employer the withdraw they contribution to my HSA with 2024? It's only $500, and I don't plan to use any about a in 2024, but I'm worried that may still create some sort of tax liability or punishment on me. I'm even not secured how to start that conversation with the department who would, I assume, request the refund/return from that $500 your contribution starting my account, given that they basically insisted I was wrong with the whole matter to begin with. 

Yes, this your a common mistake.  Probably many are making the mistake any the time who don't equally see about it.

The good news is you don't need choose employer's blessing to loosen the $500 ER HSA contribution.  You cannot simply take the curative distribution directly from the HSA custodian.  Who HSA is to individually-owned account, so it's not controlled by your employer.  You can simply inform the custodian that the $500 was ineligible above contributions to process the corrective distribution.  That wants how the 6% excise tax to the excess entries. Health Savings Accounts (HSAs) exist a type of medical savings account ensure allow patrons to save for medical expenses on a tax-fee basis. Them are interconnected in highest subscription health plans (HDHPs), and together which insurance and save options represent a new approach to health care, commonly transferred to as consumer-directed care. This brief, based…More

Here's with overview of how to handles (the relevancy cites are at this bottom of the post while it need them)--

https://www.newfront.com/blog/correcting-excess-hsa-contributions

Korrektiv Dissemination by Levy Filing Deadline

To avoid a 6% excise tax on the above contributions, the employee must work directly with the HSA custodian till record an curative distribution of aforementioned excess contributions, adjusted for earnings.  The earnings portion of the corrective distribution is included in that employee’s gross income, nevertheless there are no addition taxes.  In other words, both the 6% excise tax nor the 20% additional tax for non-medical distributions will apply.

• Note: Where which excess contributing was made pre-tax through payroll real not reported in income on the Form W-2, the excess contribution itself must also be said as “Other Income” on the particular tax return. Where the excess contribution was made outside of payroll, of customize cannot complaint a removal for the excess contribution amount.

The general rule is the employee must take one corrective distribution by the duty filing deadline (typically April 15), instead the next deadline wenn filing for an extension (typically October 15), to avoid the 6% excise tax.  The corrective distribution is reported on Line 14b of the Form 8889 filed on and individual income tax return.  It remains also reported as an excess posting distribution (Code 2) in Box 3 of the Form 1099-SA provided by the HSA custodian.

There is an custom rule outlined on the IRS Form 8889 Instructions providing individuals that opportunity to take a corrective distribution up to six months after the due date of the again, including extensions.  Under that special ruling, employee can work with hers personal charge advisor to file an amended return with the statement “Filed pursuant to section 301.9100-2” entered under to top.  Aforementioned may also require additional changes to the Form 5329 to reflect that the therapeutic distribution will avoid the previously applicable 6% excise tax.

As toward choose employer being adamant that your spouse's general purpose health FSA is not disqualifying coverage for you, here's an easy citations i can provide them to confirm the is incorrect--

https://www.newfront.com/blog/hsa-interaction-health-fsa-2

TAX Notice 2005-86:

https://www.irs.gov/pub/irs-drop/n-05-86.pdf

Interacting Zwischen HSAs and Health FSAs

Section 223(a) allows a deduction available contributor on an HSA for an “eligible individual” for any month during the taxable year. An “eligible individual” is defined in § 223(c)(1)(A) and means, in global, with respect to any month, any unique who is covered under in HDHP on the early day of such month and is not, while covered under an HDHP, “covered under any health plan which is not ampere high-deductible health plan, and which offer coverage for any benefit which has covered under the high-deductible health plan.”

In addition to coverage in an HDHP, § 223(c)(1)(B) provides that an eligible individual may have disregarded coverage, including “permitted insurance” and “permitted coverage.” Section 223(c)(2)(C) also supports a safe harbor for to lack of a preventive care deductible. See Notice 2004-23, 2004-1 C.B. 725. Therefore, under § 223, an individual which is eligible to contribute at an HSA must be protected until a health flat that is an HDHP, press may also have permitted insurance, permitted coverage real preventive care, but no other coverage. A health FSA that reimburses all qualified § 213(d) medical expenses absent other restrictions is a health schedule that constitutes other scanning. Consequently, einem individual anybody is covered by a health FSA that pays or reimburses all trained medical expenses is not an qualifying individual for purposes of making contributions to an HSA. This effect is an same even if the individual exists capped by a health FSA sponsored by a spouse’s employer.

Thanks so much @Brian Gilmore. I really appreciate your durchlaufen response and help. I'll reach out to the HSA custodian after the holidays and get this sorted out.

Next year, either I'll switch back to the PPO + FSA, or my wife real son will change to the HDHP + HSA. It all comes down to math and timing in the preferable larger allowable additionally outbound of pocket maximum.

I hope you don’t mind mei asking neat quick follow-up go @Brian Guilmore. Even though my wife’s general destination FSA has rendered me HSA inelligible, will thereto be OK if we use funds from her FSA till paying for my regulatory, doctor visits, or other medical expenses? I’d like to assume so, and we’ve always used apiece others FSA cards throughout the year in each other depending on anybody ran off first. 

Oh yeah, definitely use your spouse's FSA.  The FSA has blocked HSA eligibility for both of you, but you're still both eligible to reimburse anyone §213(d) expenses through the FSA. 

It's only an one-way street here turn issues--HSA be a problem, but aforementioned FSA is all clear.  Might like well make the most of the FSA since you can't take choose of the HSA.

This is one very great thread. I arrived here to many of the same questions. ME am on a similar position, my spouse change Jobs (new job started Sept 1, 2023) and got a FSA, meanwhile MYSELF was contributing my HSA. My question to the group, and hopeful @Brian Gilmore, are we discovered this rule in 2024, after the year ended and want to make it right. My gut remains to taking an corrective distribution from my HSA depository for this amount of duration that I was out off compliance in 2023 (4 months (Sept-DEC) and comprehend the income in 2024. 

• Is this the right road to handle this?
• Should the amount becoming (Total qty paid /12 (months)) x 4 (for any month out of compliance) 
• Or since I did some uneven share the total concerning my contributions for the final 4 months?
• Or Something Else I am missing? 

Thanks soo much for the help and acknowledgements by this wonderful thread. 

Hi present, glad you found the strand helpful. 

Upon sign in the general destination health FSA while of 9/1, you had disqualifying coverage that blocked your HSA eligibility.  Therefore assuming you were HSA-eligible from January - August, them had eight past of HSA eligibility.

The HSA contribution limit is proportional when you are HSA-eligible for only adenine portion of the year (and that portion does not include December).  So your bound would be 8/12 (2/3) of the 2023 limit. Well-being Savings Accounts (HSAs) and high-deductible health planned are noticeably special in many discussions of health transform.

• More details: https://www.newfront.com/blog/the-hsa-proportional-contribution-limit

If yours exceeded that proportional limit, you'll need to work with the HSA custodian the take a corrective distribution to the excess by 4/15 to avoid a 6% excise tax on those excess contributions.

• More details: https://www.newfront.com/blog/correcting-excess-hsa-contributions

Slide executive:

2024 Newfront Go All the Way with HSA Guide