This issue occurs when you answer the question "What type of of High Deductible Health Plan did [name] have on December 1, 2017?" If you answer "Family" or "Self", then if you had not previously indicated any HSA coverage for 2018, TurboTax thinks that your coverage has lapsed (had coverage at the end of 2017, didn't in 2018).
This can happen in a couple of ways:
1. The person referred to (you or spouse) doesn't even have an HSA so of course you did not do an HSA interview for that person. If so, then you couldn't have indicated any HDHP coverage. In this case, when you see the question "What type of of High Deductible Health Plan did [name] have on December 1, 2017?",
- if you (or your spouse) were covered under an HDHP for every month in 2017 or
- if you (or your spouse) were covered under an HDHP in every month of 2018 or
- if you (or your spouse) made no HSA contributions in 2017 at all or
- if you never had in 2017 or 2018 any HDHP coverage,
just enter "None" for the answer.
2. The taxpayer sees the answers of Family or Self or None and knows he/she is covered by health insurance, so puts in Family or Self to refer to the type of coverage he/she has, not realizing that he/she doesn't have HDHP coverage so should just answer "None".
If, of course, you had HDHP coverage on December 1st, 2017 but left HDHP coverage at some point in 2018, then you should answer Family or Self, according to what type you had on December 1, 2017. This is to test to see if you took advantage of the last-month rule in 2017; if so, if you did not stay under HDHP coverage for all of 2018, then there are penalties involved.
The purpose for this obscure question about 2017 is to determine if you took advantage of the "last-month" rule in your HSA in 2017. That is, if you had an HSA in 2017 and you used the full annual HSA contribution amount (instead of having it pro-rated by the number of months that you had the HDHP coverage), then you would be required to keep your HDHP coverage (your High Deductible Health Plan, which is required for an HSA) through the "testing period", in essence, through all of 2018.
