HSA Contribution Limits when on Separate Plans?

My wife and I are on 2 separate HDHP plans through our respective jobs. Our daughter is on my wife’s plan as a Self+1 option (which to my understanding, is treated as a family plan under IRS rules). My company contributes $750/year to my HSA, and my wife’s contributes $1000.

The yearly maximum contributions are $6850 for Family, and $3450 for individuals.We will be filing MFJ for the 2018 tax year.

Is my yearly max contribution to an HSA $6850, or $10,300 (6850+3450)?

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The contribution limit is at the family level at $6850

The limit includes employer contribution + employee contribution. As your company puts in $750 and your wife puts in $1000 thats $1750 of the total. YOU can put in $5100 on top of the company contributions. (5100 + 1000 + 750 = 6850)


So it’s irrelevant that we are on separate plans (me as a Self, and her as a Self+1 (family))?

Daughter is claimed as a dependent (she’s a newborn), if that makes any difference.

Yeah it is a family level limit. Doesn’t matter if you’re in separate plans.

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Related question. Wife is on a non-HDHP plan with the kids. I’m on HDHP plan with an HSA. Obviously I can fund to the individual limit. If I switch wife or any of the kids to my HDHP before the year is out do I get to contribute full family HSA in 2018? Or is there some type of prorating?

If the HDHP plan is a family plan, you can contribute up to the family limit. If it’s a solo plan, you can only contribute up to the individual limit. If you aren’t covered under your spouse’s non-HDHP plan, that plan does not affect your eligibility to contribute, or the amount you can contribute.

Something to note is that this is an IRS decision which deviates from the language of the statute. When they do that, it’s important to keep in mind that it could potentially change in the future, without a change to the law.

bold emphasis is mine :

"If you were, or were considered (under the last-month
rule, discussed later), an eligible individual for the entire
year and didn’t change your type of coverage, you can
contribute the full amount based on your type of coverage.
However, if you weren’t an eligible individual for the entire
year or changed your coverage during the year, your contribution
limit is the greater of:

  1. The limitation shown on the Line 3 Limitation Chart
    and Worksheet in the Instructions for Form 8889,
    Health Savings Accounts (HSAs), or
  2. The maximum annual HSA contribution based on
    your HDHP coverage (self-only or family) on the first
    day of the last month of your tax year.
    If you had family HDHP coverage on the first day
    of the last month of your tax year, your contribution
    limit for 2017 is $6,750 even if you changed
    coverage during the year.
    Last-month rule. Under the last-month rule, if you are an
    eligible individual on the first day of the last month of your
    tax year (December 1 for most taxpayers), you are considered
    an eligible individual for the entire year. You are treated
    as having the same HDHP coverage for the entire
    year as you had on the first day of the last month, if you
    did not otherwise have coverage."

So I read that to mean as long as you had family coverage the 1st day of the last month then you can deduct the full family coverage amount.

Theoretical question: If wife and I get divorced, both work, and both take 2 kids and put them on our respective HDHPs, we can contribute $6850 each, right?

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Yes, but you then have to retain the same coverage for 12 months - going into the next year.

Would be surprised if there’s any guidance on that. If you are unmarried during the months in which you made contributions, it seems more likely to hold up.

Like I said, theoretical. Just pointing out another marriage penalty in the tax code. Combined contribution limit is 13700. Get married? Now it’s 6850.

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It’s actually more of a penalty for having fewer kids, not getting married. Can’t do 13700 if only one kid.

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Just to be careful, while observing the family limit for total contributions, I also would not go over the individual limit for whichever of you has the ‘Self’ plan.

You would need to also make sure they are off the non-HDHP plan before you count them towards the family category. If you are covered by both a HDHP and non-HDHP you are ineligible for an HSA ( so that would likely disqualify you wife as she probably can’t drop her insurance while keeping the kids on it ).

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Not necessary, they can split it however they like as long as both plans are HSA eligible and at least one is a family plan.

I was thinking more if it was a payroll deduction and someone over zealous in the HR dept tries to deny your contribution… I always try to avoid dealing with HR whenever possible :slight_smile:

Divorce for Fun and Profit!