@W16VA
Some of this is still unclear.
2. When do you plan to start Medicare coverage?
- Still on company FSA, but likely no more as of Jan 1, 26, to free up my wife’s eligibility for HSA later by April/May 2026 (school calendar). That open enrollment period becomes effective on July 1st.
This is unclear. An FSA is only one component of a company medical plan. You might have an HDHP, a PPO, an HMO, or something else, all of which could have an FSA as part of it. If you go off the company plan completely in January 1, 2026, what would your wife's medical plan be? Do you want to stay on the company plan? That's up to you and the company, you just have to be on a plan that does not have an FSA.
5. Can your wife enroll in an HDHP in August 2025 without an FSA? Would that HDHP be self-only or family (self plus her spouse)?
She would, but currently being dependent on my 2025 FSA excludes that possibility. If she could, she would like as HSA-family, since there is at least me and one likely dependent on her next 3 years returns.
This makes no sense to me. An FSA can defer a maximum of $3,300. That does not seem like something she can "rely on." Do you mean she relies on your primary insurance policy from work, which contains an FSA as part of the overall medical benefit? Also, an HSA is a bank account, not an insurance plan. It could be an HSA-eligible plan (which is also known as an HDHP), but your terminology is confusing.
I just clarified that Medicare is mandatory when you take your SS benefit. If your benefit must start no later than October 2026, then Medicare enrollment will be effective no later than April 1, 2026. That means that, no matter how you jigger the system, the most you could contribute to an HSA in your name is nothing in 2025 and 3 months worth in 2026, or about $2400 (depending on what the 2026 limit is).
I'm still not clear on why your wife can't take an HSA-eligible insurance plan in August 2025. But let's leave that as an established fact and move on.
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You want to maneuver your health coverage so that, as of August 2026, your wife has a family HDHP that is HSA-eligible, and no one has any FSA. That means you do not take a new FSA once your current FSA ends on 12/31/2025. You can have any health care coverage you want in 2026, as long as it does not have an FSA, and as long as it will not cover your wife after you start Medicare. Your wife can enroll in any medical coverage for August 2025 that is convenient for you both, as long as starting August 2026, she is enrolled in a family HDHP with no FSA.
In that situation, and assuming your wife will maintain her HSA-eligible insurance for all of 2027, your wife can contribute the maximum in 2026 using the last month rule. That would be about $8800 family limit plus $1000 personal catch-up amount. ($8800 is a guess, the 2026 limits have not been announced yet.). Your wife could also contribute about $10,000 for 2027. ($9000 family limit plus $1000 personal catch-up). Then you'll have to make new plans when August 2027 rolls around and you decide what you want to do going forward. (If she goes off the HSA-eligible plan in August 2027, that will reduce her eligible contributions for 2027, but that discussion can be saved for later.)
If you had HSA-eligible insurance for 2026, you could contribute to an HSA as well, because you would have 3 months eligibility. You could contribute $250 of your personal catch-up amount. You could also contribute up to $1,100 of the single limit, or $2,200 of the family limit, although those contributions reduce your wife's eligibility because they come out of the same family limit pool. As a practical matter, if your wife maximized her contributions, the only extra you can contribute by having your own HSA is $250.
