Author Topic: HDHP / HSA question for S-corp  (Read 3840 times)

schtauffen

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HDHP / HSA question for S-corp
« on: October 24, 2019, 06:26:39 PM »
Hello,

I recently started a consulting business and will be filing as an s-corp from 2020 onward.
I am interested in getting an HDHP from mncare and then having my company continue to contribute to my HSA that I will carry over from my current W2 job.

Do I need to have my LLC procure the health plan somehow? I talked to a group underwriter and they basically said I couldn't unless I had 5+ employees.
Or, is it that I should get it under my personal name and just pay it through the LLCs account?
« Last Edit: October 24, 2019, 06:30:44 PM by schtauffen »

SeattleCPA

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Re: HDHP / HSA question for S-corp
« Reply #1 on: October 25, 2019, 03:37:16 PM »
Hello,

I recently started a consulting business and will be filing as an s-corp from 2020 onward.
I am interested in getting an HDHP from mncare and then having my company continue to contribute to my HSA that I will carry over from my current W2 job.

Do I need to have my LLC procure the health plan somehow? I talked to a group underwriter and they basically said I couldn't unless I had 5+ employees.
Or, is it that I should get it under my personal name and just pay it through the LLCs account?

The S corp (or the LLC treated as an S corporation) just needs to reimburse shareholder-employee for the health insurance and if you want for the HSA...

You probably don't want to make the HSA contribution "via" the S corp though, for reasons explained here:

https://evergreensmallbusiness.com/how-the-irs-destroyed-the-section-199a-deduction-for-small-business-s-corporations-and-partnerships/

I.e., just have the guy or gal who is the shareholder-employee make the HSA contributions personally. (The S corp can and should pay for the health insurance... even though it'll grind down your 199A deduction.)