HDHP Lapse that didn't happen

[louis_schilling]

TT is giving me a screen that says "Did Mary's High Deductible Health Plan coverage lapse in 2023 due to disability?" and providing a radio button answer, neither choice of which is valid for us. Our family HDHP never lapsed at all for either of us during 2023 or any other year. Where is TT getting this information from and how would TT know anything about our health coverage?

[AnnetteB6 · Accepted solution]

Take a closer look at the question on the screen just prior to the one telling you there was a lapse in coverage.

If both you and your spouse are covered under the same family plan, then the person with the HDHP in their name will indicate they had a family plan.  The other person will indicate they had None because the HDHP was not in their name.  

[TaxMI]

While that 'answer' of selecting none seems to get the desired result, I would argue the question is so poorly written it caused  (and continues to cause) visits to the Community Help site. Maybe TT 2024 will correct it?

[redlinechavez]

OK I'll select None.  I still think TT wording is incorrect.  Did someone in Security set up this question, nothing they do makes any sense.  

[kfabela11]

This did not work for me. I have the HDHP plan from my employer so I used family under my name and none under my husbands. It still says I had a lapse in coverage.

[BillM223]

@kfabela11 

Did you have an HSA in 2022?

Did you make any contributions to it in 2022?

Did you have HDHP coverage for all months in 2022 (or HDHP for no months)?

If your answers are NO, NO, and YES,

then answer NONE to the question about coverage on December 1, 2022.

[NC572]

I am having the same issue in 2025 doing my 2024 taxes.  It asks what coverage we had as of Dec 1 2023.  When I select family for me, and none for my husband (he is on my plan), it says it sees I had a lapse in coverage.  HOWEVER, we have never had a lapse in coverage.  Neither of us have had an HSA, so maybe that is why, but I don't want this to seem like I am admitting a lapse in coverage!  Did you basically say none for both and leave it at that?  Did you have any issues last year?

[BillM223]

If neither of you had an HSA, you probably never had HDHP coverage (High Deductible Health Plan, a particular type of health policy), so when you were asked why type of HDHP you had on December 1, 2023, you should have answered NONE, because you never had HDHP coverage.

Or did I misunderstand you?

[louis_schilling]

For the last 2 years since getting this question answered, I have answered NO to the question "Was [wife] covered by an HDHP at work"? (or whatever the exact wording of it is) Because she wasn't, she's a dependent on my plan. That has worked fine for 2y.

[BillM223]

The question is poorly worded and a lot of taxpayers shouldn't even see it.

In your case, if the two of you shared coverage from an HDHP, then likely one of you did not go through the HSA interview and tell TurboTax what HDHP coverage you had.

Then, when TurboTax thinks that that person did not have HDHP coverage in 2024, it asks you what kind of HDHP coverage you had on December 1, 2023. If you answer Family or Self, it says to itself aha! you had a lapse in coverage. 

The best way to deal with this situation is to just answer NONE to the question of "What type of HDHP coverage did you have on December 1, 2025?" because TurboTax in many cases should not be asking this question.

@louis_schilling 

[NC572]

But did you answer "family" for yourself?  If I put family for myself, it still says there was a coverage lapse.

[NC572]

I carried the HDHP coverage for the family, and neither of us have an HSA.  So putting NONE on mine, even though I have a family plan, is fine.  Right?  

My assumption here is that the only time the HDHP coverage actually matters on the taxes is to prove whether or not we are eligible to have an HSA.  Which, since we don't even have one, doesn't matter in this case.  Is that correct? 

Just wanted to make sure I understand.

[BillM223]

NC572

I admit to being surprised that you have HHDP coverage but don't have an HSA. If this is true, you are missing out on one of the best tax benefits you can have. In essence, you get a tax discount (equal to your marginal tax rate) for every dollar that you pay put of the HSA for your HDHP deductible.

No, the "What type of HDHP coverage did [name] have on December 1, 2023?" doesn't care if you had an HSA or not.

It only cares if you went through the HSA interview to show what kind of HDHP coverage you had in 2024, and if you used the "last-month rule" in 2023 (this would maximize your annual HSA contribution limit).

Listen, if you didn't have an HSA in 2023, then you made no contributions to it in 2023, so answering NONE is the right answer, because the question is only intended for people who

• made contributions to their HSA in 2023
• had HDHP coverage on December 1, 2023, so used the "last-month rule".

If neither of those bullets apply to you, then the question doesn't apply to you, so answer NONE.

@NC572 

[NC572]

Thanks for your input.  My employer actually provides us with an HRA for most of the deductible.   Then I have an FSA for the rest.