HSA Employer Contribution

[tsteiner99]

My husband does not have a HDHP but his employer puts $1000 in an HSA every year which he uses for medical bills. He doesn't contribute to the HSA at all. The 8889-S form is forcing me to say that he had a HDHP when he didn't and asking questions like what months he had this coverage when he didn't have it at all. 

Not sure how to handle this but the headache is not worth $1000.  

[Opus 17]

You need to clarify if this is an HSA (health savings account) or an HRA (health reimbursement arrangement).

If it is an HRA, you don't report it anywhere on your tax return.  Don't report contributions, don't report withdrawals, don't report medical bills paid with the HRA.

If it is an HSA, then you are required to report it and you (your spouse actually) is subject to penalties if any contributions are made to an HSA when he is not eligible.

For more about HRAs and HSAs, read here.  https://www.irs.gov/forms-pubs/about-publication-969

If you are not sure what your husband has, contact the employer. 

[BillM223]

Your husband's employer has made a recurring mistake, one that an employer should have known better than to do.

On your husband's W-2, does this contribution appear in box 12 with a code of W? If not, then you can pretend that it is not an HSA. However, I assume from your post that the $1,000 is associated with code W, which is fouling things up.

Since this is causing trouble for you and your husband (by "trouble", I mean "money" and "aggravation"), I would encourage you to write a letter (yes, in writing) to his employer pointing out that individuals who do not have legitimate HDHP coverage are not eligible to receive contributions into an HSA, whether from themselves, their employers, or anyone else. In this letter, please point out IRS Publication 969 which explains HSAs in some detail. Note that it is written for the employer for the most part, not for the employee.

If that doesn't work, I would next encourage you to contact a local tax professional (an enrolled agent, a CPA, or a tax attorney) who knows about HSAs (many don't, however), to get them to talk to your husband's employer to educate them on HSAs. Note that there are a number of HSA-themed websites which may prove to be a good place to start.

You should not let this drag on.