Why does it think my wife had a break in health coverage?

[flyfresno]

Turbotax thinks my wife had a break in her HDHP in 2020, but she did not. I cannot find any way to fix this; I've been through the section three times and it keeps asking why she had a lapse, even though she did not (she's had coverage through me for over three years now(. Anyone else have this problem? How do we fix this? 

[MontyAz]

I have the same issue.

[JohnW152]

Your issue is with the question that asks "What type of High Deductible Health Plan did [name] have on December 1, 2019?" 

Unfortunately, the question does not clarify that it is only for a small group of taxpayers and that all other taxpayers should answer "NONE".

NOTE: each spouse can have an HSA. The use of "you" below refers to whichever spouse's name was in the question above.

This question is trying to determine if you utilized the "last-month" rule in 2019 (yes, 2019). The last-month rule lets you use the full annual HSA contribution limit if you had HDHP coverage on December 1, even if you were not covered by an HDHP for all of the year. 

However, the catch is that if you used the last-month rule, the IRS requires that you stay under HDHP coverage for all of the following year (2020).

***NOTE*** This question occurs on the taxpayer who does not have an HSA, so never had a chance to tell TurboTax in the HSA interview what their HDHP coverage was for 2020.

So, the fix is this: go back to the question (at the end of the HSA interview), and: 

• If you had HDHP coverage for all of 2019, then enter NONE 
• If you had no HDHP coverage for all of 2019, then enter NONE.
• If you did not have an HSA in 2019, then enter NONE.
• If you had an HSA in 2019 but did not contribute to it in 2019, then enter NONE. 

Only taxpayers who had their own HSA in 2019 AND who contributed to their own HSA in 2019 should answer “Family” or “Self” or “None” (which can be the right answer in some cases).

[MontyAz]

Well, that works but that question is poorly worded.  From all the people asking about this topic, looks like it hasn't changed in many years.

[Mfaulk9258]

It’s still doing the same thing for the  2022 tax year. Ugh. 

[Dd103]

What type of High Deductible Health Plan did [spouse] have on December 1, 2023? She had a family plan, which is somehow the wrong answer. How is this still so terribly poorly worded year after year? I cannot understand how the right answer is none, but that’s the response that doesn’t ask follow up question that is not applicable.

[AnnetteB6]

Even though the answers do not sound like they are correct, this is the way the questions need to be answered in TurboTax to correctly report the situation you described.  

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.  

@Dd103 

[Dd103]

That’s a little more clear. Why not ask the question in a way that conveys that? The answer none implies no coverage. There should be an option for covered by someone else’s plan.