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Level 1
posted Sep 1, 2021 8:38:53 PM

HSA issue; overlap with employer plan

Hello! My employer healthcare coverage was slated to end at the end of Feb (this was confirmed via email by the employer).

 

At that point I opened a HDHP plan and contributed $300 to a HSA. Then due to changing federal laws I was able to switch to a better low cost plan that wasnt a HDHP and stopped contributing to the HSA.

 

Now looking at my old insurance site, it says my plan was actually termed the following month (end of March) so it looks like I had my employer plan at the same time as the HDHP plan.

 

What is the best course of action (I have accrued around $40 dollars on the HSA account)?

 

Thank you!

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1 Best answer
Level 15
Sep 2, 2021 9:27:17 AM

first, contact your former employer so the discrepancy between the e-mail and what some other record shows can be reconciled.  if the employer's e-mail was wrong that's too bad. you could get a lawyer but likely they would probably tell you nothing can be done.  it's the tax laws that matter. so if you were covered by your employer's non-high deductible plan in March you weren't eligible to contribute. you need to withdraw your contribution and any earnings thereon. contact the plan administrator to do this. 

2 Replies
Level 15
Sep 2, 2021 9:27:17 AM

first, contact your former employer so the discrepancy between the e-mail and what some other record shows can be reconciled.  if the employer's e-mail was wrong that's too bad. you could get a lawyer but likely they would probably tell you nothing can be done.  it's the tax laws that matter. so if you were covered by your employer's non-high deductible plan in March you weren't eligible to contribute. you need to withdraw your contribution and any earnings thereon. contact the plan administrator to do this. 

Level 1
Sep 2, 2021 9:41:15 AM

that makes complete sense. Thank you for the quick reply. Much appreciated!