Dependent with HSA

[yubrian]

I lived with my parents for 9 months of 2019 and then I moved out and got a job in a different state with my own HDHP. They were covered under Obamacare. I'm being asked on turbotax if I was covered by a HDHP part of 2019 and I need to check the months where I was covered with them and when I was covered by myself. Is Obamacare considered a HDHP?

[Opus 17 · Accepted solution]

If you can be claimed as a dependent, you must check the box that says you can be claimed as a dependent, and you are disqualified from making any HSA contributions.  You can be covered by your parent's insurance while not being a tax dependent, because the age limit for being a tax dependent is 18 or 23 and the limit for being covered by a parents insurance is 26.

First make sure you can't be claimed as a tax dependent.  You can be claimed as a tax dependent if you are age 23 or under and also a full time student, and if you provided less than half your own support over the whole year.  (You were living alone for 3 months but supported by your parents for 9 months.)  If you are age 24 or older, or age 19 or older and not a full time student, you can't be claimed as a tax dependent unless you are disabled.

Then, ACA insurance can be eligible for HSA contributions (can be an eligible HDHP), it depends on the coverage limits. 

For a family insurance plan, it must have a deductible equal or higher than $2700, and the annual out of pocket maximum expense must be $13,500 or lower.  If you aren't sure, ask your parents or check the web site for their insurance plan.

If you were covered by a qualifying family plan, then you would check "family plan" for those months, even though it was in your parents name, and then "Self only" plan for the months where you had you own insurance (but, only check "Self" if you have self coverage on the 1st of the month.  If your job and insurance started September 15, you check "self" starting for October.)

If your parents insurance was not qualified, then you were covered by non-qualified insurance for those months and self insurance for the end of the year.

[BillM223]

"Obamacare", that is, health insurance under the Affordable Care Act may be HDHP insurance or not.

The best way to know is to contact the insurance carrier and just ask them. I say this because there is more to being an HDHP than the high deductibles. Any insurance carrier will know if their policies are HDHP or not.

Conversely, the letters HDHP are often printed on the insurance card for an HDHP policy. If you look at your old card (from your parents' policy) and it has HDHP on it, then it was an HDHP policy. Otherwise, call them to be sure it was not.

P.S. Is it possible that you could be claimed as a dependent of your parents (it does not matter if you were claimed, but only that you could be)? Please review the rules for being a dependent in IRS Pub 17 starting on page 25.

If you COULD be claimed as a dependent, then you are not allowed (well, in 2019) to make contributions to an HSA in that year.

[yubrian]

Thank you for your answer @Opus 17  this helps a lot! I will ask my parents if the Obamacare was a HDHP.

On my Turbotax I also needed to answer this question I'm supposed to Check the box to indicate your coverage under a high-deductible health plan (HDHP) during 2019. In this scenario if my parents did end up having a HDHP would i check family? And if theirs wast a HDHP would I check self only?

[Opus 17]

You need to indicate you had HDHP for only part of the year or that your insurance changed.  I forget how the question is worded.  (You did not have single or family HDHP for the whole year.) 

That should bring up a calendar and you can check for each month that you were covered by a family plan, a self plan, or non-eligible insurance.

If your parents covered you under their HSA-eligible family plan, you would check that you had a family HDHP coverage for those months and self for the rest.  If your parents' insurance was ineligible, you would click ineligible for those months and self for the rest.