Can I contribute to former employer's HSA if now self employed but retained HSA benefit through cobra?

mrfkl · ‎December 22, 2019

I left my last job in early 2019 but opted to continue my benefits via COBRA, including a Health Savings Account/HSA. I'm now self employed as a consultant. Can I make contributions to the same HSA with my self employment income?

I do have a qualified High Deductible Health Plan (which is an IRS requirement for HSA eligibility).

I understood so. However when I spoke with customer service of the COBRA administrator (DiscoveryBenefits.com) they referenced me to some documentation that indicates that owners of sole proprietorships are no eligible for an HSA. See verbatim below (last bullet).

Does this apply in my situation? It seems strange to me that I'm allowed to extend my health benefits and HSA via COBRA, but not be able to contribute. Thank you.

From DiscoveryBenefits.com documentation:

"You are not eligible for an HSA if:

You are claimed as a dependent on someone else’s tax return.
You are covered by another plan that conflicts with the HDHP, such as Medicare, certain Flexible Spending Accounts (FSAs) or select Health Reimbursement Arrangements (HRAs).
You or your spouse are contributing to a Medical Flexible Spending Account (Medical FSA).
You are the owner (or family member of the owner) of a Limited Liability Company (LLC), S corporation, sole proprietorship or partnership company."

Critter · ‎December 23, 2019

This is from the IRS directly :

Qualifying for an HSA

To be an eligible individual and qualify for an HSA, you must meet the following requirements.

You are covered under a high deductible health plan (HDHP), described later, on the first day of the month.
You have no other health coverage except what is permitted under Other health coverage , later.
You aren’t enrolled in Medicare.
You can’t be claimed as a dependent on someone else’s 2018 tax return.

https://www.irs.gov/publications/p969

dmertz · ‎December 23, 2019

There is no such limitation as described in the last bullet point provided by DiscoveryBenefits.com and there never has been. I suspect that whoever wrote that confused an HSA contribution with something to do with a self-employed health insurance deduction.

The HSA account belongs to you, not to your former employer. As long as the HSA custodian permits you to deposit contributions into the account (I can't imagine that they would not allow you to do so), yes, you can use the existing HSA account to receive your HSA contributions.

Can I contribute to former employer's HSA if now self employed but retained HSA benefit through cobra?

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