Insurance company contribution to HSA

[MarkSe]

My HDHP insurance plan passes $150/month into an HSA account set up for me.  Is this amount ($1800/yr) deductible in addition to the HSA deduction that I make on my payroll?  This amount is not reflected on my W-2.

[DavidD66 · Accepted solution]

If your HDHP health insurance plan is provided by your employer, and your premiums are paid with pre-tax dollars, then you cannot deduct what the Insurance Company contributes to the HSA.  In order to take a tax deduction, you must have an expenditure paid with after tax dollars.

[dmertz · Accepted solution]

The $1,800 passed through the insurance is not deductible on your tax return.  It was never included in the amount in box 1 of your W-2 because it was part of the health insurance premium that was deducted from your pay, so it has already been excluded from your taxable income.

As you proceed through the HSA section of TurboTax, TurboTax will ask you if your employer told you about any other contributions to your HSA.  Answer Yes, then enter $1,800 in the box labeled "Employer and payroll contributions not included on your W-2."  This will allow TurboTax to include the $1,800 on Form 8889 in determining whether or not you have exceeded the maximum permissible HSA contribution for 2020.

[TREK7280]

Similar question, except I am retired and get a 1099R.   My former employer subsidizes part of the cost of the health insurance, and I pay my portion of the premium with post-tax dollars.  The insurance company makes a monthly contribution to my HSA.  The premium I pay in post-tax dollars exceeds the contribution from the insurer to my HSA.   Even including the insurer's contribution, I am under the annual limit on HSA contributions.  Is the insurer's contribution to the HSA deductible by me?

[DaveF1006]

It is deductible by you just as long as the contribution paid for by the Insurance Company is made with post-tax dollars. Just a note of caution, If you are over the age of 65, contributions are not allowed if you are on Medicare.

[TREK7280]

Thanks.  I'm aware that medicare enrollment by the policy holder prevents HSA contributions. 

Looking at your answer - about 3/4 of the total insurance premium is paid directly to the insurer by my former employer, and I pay 1/4 to the insurer.   My share exceeds the monthly insurance company HSA contribution, and I pay my share with post tax dollars.  The insurance plan brochure says "a portion of your monthly health plan premium is deposited to your HSA" and calls it a "premium pass through contribution."   I'm not aware of any way of actually tracking the source of  funds used to make the contribution.   Given that the former employer paid 3/4 of the premium, is that a sufficient basis to conclude that the insurer's HSA contribution is "made on my behalf" with post tax dollars, and therefore included on line 2 of the form 8889, and thus deductible by me?