HSA premium pass-through and form 8889

[gwba]

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. 

[BillM223]

@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.