Hi I read several thread about this already, but still felt unclear. I hope I can learn some real answers here, thank you so much!
I got married 11/7/2022.
Husband: Term is May-April. Has HSA with limited FSA. Has contributing to the max as single person with biweekly checks.
Me: Term is Nov-Oct. Has/had general FSA. I am set to enroll into his insurances (haven't started yet) and set to end my insurances/FSA account by end of the year.
My work said for the new term starting Nov 2022 I could 'keep my FSA account open but not active' by enrolling with '$0' new contribution. Work said this way I could use the leftover from last term (work selected max $500 carryover not the 3 months one), and not be counted as having FSA active this term because there's no new contribution, and that Husband can choose to increase his HSA limit right away. I just learned these few days that I still have FSA contribution from my Nov. payroll. Work said they will roll that into credit for next paycheck so I assumed it will still appeared as if I have no FSA contribution this month when they fix it.
Question 1:
A) Although work said no FSA contribution on my payroll counts as not having FSA active, from what I read through the treads, as long as I have money in the FSA account and can spend it it's considered active? I am hoping to spend it all this month.
B) I read that since coverage is determined from 1st of the month, husband is still legally contributing to his HSA for November. Since I am unclear of my FSA being count as active or not, he should halt any new contribution now until I have spent all the money in the FSA account and work has formally close it. Work seems to want to formally 'close' my FSA account only when they close my insurances. Since they have to wait until husband's work to give them certificate of coverage, this will most likely drag onto Dec. Any HSA contribution made during the overlapping period starting December will need to be taken out before tax filing next year to avoid being penalized.
C) Let's say my FSA is considered 'active' for Nov and Dec. Once he's married, is his HSA contribution limit considered to be family starting in Dec and single before that or family the whole year? In other words, is his limit this year considered to be $3650*11/12 or 7300*11/12 (since Dec is considered ineligible)? If it's 7300*11/12, then we will have nothing to worry about since his single contribution has only been 3650*11/12? if it's 3650*11/12 then I guess his last 3 biweekly paychecks we will have to withdraw that amount if we can't halt his contribution on time.
D) If my FSA is considered 'active' throughout Dec. and I close it clean with no fund inside in Dec., is husband immediately okay to start his contribution in Jan. 2023, this time contributing to 7300 max next year?
E) His limited FSA should not conflict with my FSA and he doesn't need to do anything about that right?
Thank you so much for answering! I feel really bad that I didn't choose to just end my FSA for good end of Oct. and now running into my husband possibly getting penalized.
