My health insurance is a PPO plan with a Health Savings Account (HSA). Typically only High Deductible Health Plans (HDHP) are qualified for an HSA.
When doing my taxes, I have to file a 1099-sa form for my HSA. When filing this form, I am prompted with the option to select whether I had a PPO or HDHP in 2018. I have a PPO plan with an HSA. When I select PPO, I receive a message that says you have "an excess contribution of $1,200. This amount is being taxed an extra 6%. But, anything withdrawn between January 1 and April 15, 2019 avoids the additional tax."
This excess contribution of $1,200 in my HSA is from my employer in 2018, they contribute $100 monthly to my HSA, I have contributed zero dollars in 2018. Any money in the HSA account is supposed to rollover yearly, not be treated as an excess. When I select the option to not withdraw the $1,200 from the account, I am told I will be taxed an extra 6%.
My questions are, Is there anyway to avoid the tax? I was told the money would rollover no matter what. Could this just be a TurboTax error? Is it the money in the HSA account that my employer contributed that will be taxed? I don't think withdrawing $1,200 is the way to go, because this money is supposed to accumulate over time in the HSA if it is not being used.
Any help is appreciated, thanks.
