I left my last job in early 2019 but opted to continue my benefits via COBRA, including a Health Savings Account/HSA. I'm now self employed as a consultant. Can I make contributions to the same HSA with my self employment income?
I do have a qualified High Deductible Health Plan (which is an IRS requirement for HSA eligibility).
I understood so. However when I spoke with customer service of the COBRA administrator (DiscoveryBenefits.com) they referenced me to some documentation that indicates that owners of sole proprietorships are no eligible for an HSA. See verbatim below (last bullet).
Does this apply in my situation? It seems strange to me that I'm allowed to extend my health benefits and HSA via COBRA, but not be able to contribute. Thank you.
From DiscoveryBenefits.com documentation:
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This is from the IRS directly :
To be an eligible individual and qualify for an HSA, you must meet the following requirements.
You are covered under a high deductible health plan (HDHP), described later, on the first day of the month.
You have no other health coverage except what is permitted under Other health coverage , later.
You aren’t enrolled in Medicare.
You can’t be claimed as a dependent on someone else’s 2018 tax return.
There is no such limitation as described in the last bullet point provided by DiscoveryBenefits.com and there never has been. I suspect that whoever wrote that confused an HSA contribution with something to do with a self-employed health insurance deduction.
The HSA account belongs to you, not to your former employer. As long as the HSA custodian permits you to deposit contributions into the account (I can't imagine that they would not allow you to do so), yes, you can use the existing HSA account to receive your HSA contributions.
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