Last year, I contributed a total of $1800 on my HSA. My wife started working around June last year, and we enrolled her for FSA when the open enrollment started which was effective September - December. She contributed $100 into it.
We honestly didn't know that we can't have both accounts, or we can, it's just that one cannot make any contributions to the account.
Would I need to ask my HSA provider to withdraw any contributions I made during September-December when my wife's FSA was active even though we didn't really hit the maximum contribution limit?
Also, my wife didn't enroll in FSA plan this year, but we still got the $100 on that account. Does that mean that her FSA plan is still active meaning I still can't contribute on my HSA?
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So, you are saying that you have HDHP coverage through your work, and that your wife had an FSA starting in September...is that right?
What kind of HDHP coverage did you have? Family or Self-only?
If, in fact, you had HDHP coverage from January to August, then your HSA contribution limit will be your HDHP coverage (8,300 if Family or 4,150 if Self-only) times 8 months. Plus since this is your HSA (the HSA belongs to the individual so each of you can have one), if you are 55+, add 1,000 times 8 divided by 12 to the previous total.
It does not matter when you made contributions over the year (yes, I know the documentation makes it sound like it does), if the total that you contributed does not exceed the previous total for your annual HSA contribution limit, then you do not need to withdraw anything. Not to worry, TurboTax will walk you through this.
What is the policy of your employer vis-a-vis the $100 in the FSA? If she is not enrolled in the FSA for 2025, how can she still use that $100 for medical expenses? It would be better if the employer would just refund that $100 to you so there would be no confusion. And because that $100 was not taxed last year, you would have to add it to other income - but ask your employer because if they refunded the $100, they might add it to your W-2 automatically - this would be good and easier for you.
There are two types of FSAs that do not conflict with an HSA:
• Limited-purpose health FSA or HRA. These arrangements can pay or reimburse the items listed earlier under Other health coverage except long-term care. Also, these arrangements can pay or reimburse preventive care expenses because they can be paid without having to satisfy the deductible.
• Post-deductible health FSA or HRA. These arrangements don’t pay or reimburse any medical expenses incurred before the minimum annual deductible amount is met. The deductible for these arrangements doesn’t have to be the same as the deductible for the HDHP, but benefits may not be provided before the minimum annual deductible amount is met.
Is it possible that your FSA was one of these? You may need to ask HR about this.
Hey, first of all, thank you very much for your response!
Yes I have an HDHP coverage through work last year, and yes she enrolled in FSA and became effective September of last year.
I have a Self-only plan which would be $4150 max contribution.
So since my wife started her FSA on September, that would mean that I was still eligible to contribute from January to August, which would be $2766.64 max contribution for 8 months. Me and my employer had a total of $1820 contribution last year(plus $100 from my wife's FSA if that counts towards the limit) and I'm still below the max total contribution.
My wife's FSA was a healthcare FSA, which I think conflicts with my HSA contribution. The $100 would be the fund from the previous year which was already included in my wife's W-2 last year. I talked to Cigna(where the FSA is from) and they said that those funds will expire after the grace period of 90 days.
So from what I heard, the grace period is still considered a disqualifying event for me to contribute to my HSA.
So, yes, you could contribute prior to April 15th the difference between your calculated HSA contribution limit and the $1,800. The $100 in the FSA does not apply.
Yes, the healthcare FSA would conflict with your HDHP coverage, because the FSA and the HSA could both pay for the same things.
You are correct that you are not eligible to contribute to your HSA while the FSA is still active in the grace period. This means that you will have to remember to make the HSA contribution between April 1st and April 15th (i.e., after the grace period has expired). But if you are sure you will do this, you can enter the contribution on your 2024 return.
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