HSA premium pass-through and form 8889

I have not heard this terminology before, but I did find this reference: "many plans have what's called a "premium pass through," where a portion of your HDHC premiums are automatically contributed to the HSA." Indeed, I now see a number of plans from major companies seem to refer to this.

• Go to Federal Taxes->Deductions & Credits->Medical and click on "HSA MSA Contributions".
• Go to the screen entitled "Did your employer tell you about any other contributions?" (see screenshot below)
• Click on "yes" to exposes the bottom three lines
• Enter the amount of the pass-through on the last line (see red arrow)

Thank you! I can't tell if the premium pass through was included in the amount coded with "DD". I think either way I'll need to include the premium pass through on Form 8889, Line 9 since that line is really about making sure I don't go over the contribution limit. After some more googling, I found something that said the premium pass through is included when determining whether or not I've gone over the contribution limit.

I'll have to ask my employer if the premium pass through was included in the amount coded "DD".

Thanks so much for your help!

I've never heard of a premium pass through before, can you tell me which carrier your using for your HDHP. I would like to look into this further. Thanks

Jeanene

Hello,

I am having to report additional employer pass through HSA contributions on my 2021 taxes and I couldnt locate the additional employer contributions option on the 2021 version of Turbotax. How can I report this for 2021? Thanks

Perhaps you mean the screen Did your employer tell you about any other contributions?

These are contributions that may not be reported in box 12 of your W-2.

To locate this screen after entering your 1099-SA:

• At the screen Here's what we have so far click Done.
• At the screen Now let's work on HSA click Continue.
• At the screen Did you inherit this HSA? click No.
• At the screen Let's enter your HSA contributions click Continue.
• The next screen is Did your employer tell you about any other contributions?

That worked, thanks! The sentence referring to a previous year threw me off but once I answered yes I was able to add the additional contributions

@adaml @My husband is a government employee and we also have hsa contributions from a "premium pass through". So are these considered employer contributions? Is it accurate to answer yes to "Did your employer tell you about any other contributions?" Just an odd question and kind of confusing. Trying to figure out if these contributions even need to be reported in turbotax. Does form 8889 need to match form 5498? Or is it ok if they look different??

I have the same issue... govt employee here

made a contribution of $5400 (is this considered employer contribution since it is pretaxed and so does it go on line 9 of form 8889.  Then does the $1800 go on line 10 as qualified hsa distributions.   

thanks

@akay

"Just an odd question and kind of confusing."

It was added as a necessary question when employers started doing things not foreseen by the original HSA code.

"Trying to figure out if these contributions even need to be reported in turbotax."

Yes, they do, because the aggregate of contributions to your HSA must be less than or equal to your annual HSA contribution limit, which requires TurboTax to have you enter ALL contributions.

"Does form 8889 need to match form 5498? Or is it ok if they look different??"

No, the 8889 does not need to match the 5498-SA from any given year. This is because the 8889 is pretty much focused on the current tax year which the 5498-SA has items from multiple tax years. Don't worry about the 5498-SA - just stick it in your tax file.

@vhomer1977

"made a contribution of $5400 (is this considered employer contribution since it is pretaxed and so does it go on line 9 of form 8889. " 

Does the $5,400 refer to an HSA premium or something else? If it came from your employer, then it is an employer contribution.

"Then does the $1800 go on line 10 as qualified hsa distributions.   "

Where did this $1,800 come from? Was this a direct contribution to the HSA custodian? We need some context here.

But I can say that it does not belong on line 10 because that is for Qualified HSA funding distributions, which are a direct transfer from your IRA administrator to your HSA custodian - and I am betting that this is not what you did. Is this $1,800 is supposed to be a direct contribution to your HSA? If so, then it belongs on line 2.

Hi,

$5400 was a one-time HSA contribution I elected to make through my payroll - so the money went directly from my paycheck to HSA account

$1800 is pass thru contributions to HSA from my  insurance plan (in this case GEHA HDHP, $150/mo x 12)

Thereby, I maxed the $7200 for the year for family coverage

thanks

OK, these are both, then, counted as "employer contributions", so will end up on line 9. I don't know what the value is of your code W amount in box 12 on your W-2 (if any), but whatever is not there needs to go in a separate place.

As you go through the HSA interview, there will be a question that is something like, "Did you employer tell you about any other contributions?" Even though the fine print makes a reference to a different year, you will want to answer YES.

This will expose 3 new lines, and the third one is "Employer and payroll contributions not reported in Box 12 of your W-2."

Enter whatever amount of the 7,200 that is not on the W-2 here.

only $5400 in the W column on my W2

Enter the $1800 contribution GEHA made to your HSA on that line Bill referenced - Contributions not already reported on your W-2.   Those contributions count toward your contribution limit.   As long as you have ''family'' HDHP coverage all year, you are within the contribution limits for the year.    @vhomer1977

I'm not sure the answer posted here is correct. Maybe they stopped phrasing it as premium pass through to clarify the issue. The contributions by your health insurance company aren't from your employer, rather a third party on your behalf. The HSA contributions deducted from your pay stub are subtracted from your income. The $100-$150/mo from the insurance company are from a third party on your behalf. As such from From 8889 IRS instructions: 

"Include on line 2 only those amounts you, or others on your behalf, ...."

I am glad that there are many folks having a same issue. To wrap up, 

1. W2 Box 12 W shows the amounts that employee contributed

2. Insurance company such as Cigna, BlueCross, Carefirst etc, is contributing DIRECTLY to the HSA amount each month. My case I got total $1,800 per year which is NOT included in W2 Box 12 W. 

3. HSA company (my case HealthEquity) sends 5498-SA form (which is NOT required to report to the tax form, but informational purpose). This form includes $1,800 (5498-SA Box -2: Total contributions made in 202x). Some HSA company like Fidelity does NOT even issue 5498-SA by the end of May (after tax season)

https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/form-5498-SA_HSA.pdf 

4. Now the question is where this additional money from the insurance company contributed for us. 

  Should be 8889 Line 9 with manual input? 

  or Line 2?

  For me, I have NOT filed these money ever (Actually, my accountant never added insurance contributed money and never asked me what to do) However, I also never over-contributed more than maximum amount of HSA each year to be safe. It means my yearly HSA contribution + insurance company paid money never made more than maximum HSA money. For me, I interpreted this way. As I mentioned above, 5498-SA is not required for tax reporting, thus I (or my accountant) didn't include insurance company paid money into 8889.  

If you are curious, just search "5498-SA" form from TurboTax, then you will see first msg like below. 

"Don't Enter Your Form 5498-SA".  

Nevertheless that we don't enter 5498-SA in tax filing, I agree to report insurance contributed money as well in the form 8889 line 9 to make sure that maximum contributed money is NOT more than what we can contribute. 

@Loki_nv

To your point that the health insurance company's contribution should be listed on Line 2, I will point you to this: In the 2023 form 8889 instructions under Line 9 it says, "Also, include contributions made by a health insurance plan  (emphasis mine) on an employer's behalf."

@kirren1 

It should be on your W-2, in this way. As noted above, the amount with code W in box 12 is removed from Wages in boxes 1, 3, and 5. In the same way, the amount with code DD in box 12 is also removed from Wages in box 1, 3, and 5.

So if part of the premium being paid to the health insurance company on behalf of the employee is the "pass-through" amount which ends up being contributed to the employee's HSA, then this contribution is also being removed from Wages in boxes 1, 3, and 5, so it would be appropriate to add this as a contribution that your employer told you about.

@gwba 

"1. W2 Box 12 W shows the amounts that employee contributed" - as I think you know but others might not, the code W amount in box 12 on the W-2 includes both contributions from the employer and from the employee by means of payroll deduction.

"2. Insurance company such as Cigna, BlueCross, Carefirst etc, is contributing DIRECTLY to the HSA amount each month. My case I got total $1,800 per year which is NOT included in W2 Box 12 W. " - as you see in my answer to Loki_nv above, the IRS instructions for form 8889 specifically require that Line 9 on the 8889 list contributions from health insurance plans.

3. "Some HSA company like Fidelity does NOT even issue 5498-SA by the end of May (after tax season)" - Yes, this is why the 5498-SA is not required to be entered into TurboTax. Note that the 5498 (for IRAs) operated in a similar way.

4. "4. Now the question is where this additional money from the insurance company contributed for us. 

  Should be 8889 Line 9 with manual input? 

  or Line 2?" - 

Per the IRS instructions for form 8889 (see above), the pass-through premium (and HSA contributions) should be reported on Line 9.