Plan to overcontribute to HSA?

[Mgmny]

Hi!

I will be on an HSA eligible account for January only of this year. If i contribute to this account, my employer will match 50% of my contributions up to $1500. I am changing companies at the end of the month and will no longer be covered by HDHP.

So I will be eligible for $7200/12 (family HSA) contributions for 2021 (if i'm reading rules correctly) = $600. However, I can set my last paycheck to contribute $3000, so my company matches my contribution to $1500.

I think I will need to withdraw the funds in excess of $600 (so, 4500 - 600 = $3900) and pay taxes on it, but i believe i would get to keep the $1500... is that correct?

Are there any other issues with this plan?

Thanks!

[bacchi]

Only if your former company comes along and asks, "Hey, where's our $1200?" Transfer the funds (if it's a company sponsored HSA broker) quickly. :)

Are you sure they'll contribute 50% of any amount in one month?

[charis]

That is interesting. My company contributes a $1800/year "pass through" to my HSA, but only at $150/month for every month that I contribute. So it's not a "match" in the traditional sense.

I guess if the company will do it and you pay the taxes...seems worth a try. Unless they can claw it back somehow.

[Mgmny]

Only if your former company comes along and asks, "Hey, where's our $1200?" Transfer the funds (if it's a company sponsored HSA broker) quickly. :)

Are you sure they'll contribute 50% of any amount in one month?

Well, i guess that's what i'm asking - are they entitled to ask for that money back? Or  once it's in my account, it's a done deal?

they will contribute 50% up to the 1500 in one year. I front loaded last year, and got my HSA done by march, so that was $500 a month for 3 months of matches.

[Mgmny]

That is interesting. My company contributes a $1800/year "pass through" to my HSA, but only at $150/month for every month that I contribute. So it's not a "match" in the traditional sense.

I guess if the company will do it and you pay the taxes...seems worth a try. Unless they can claw it back somehow.

I am going to try it, i just don't want to be in a position next October where i get a letter/phone call and they say i owe them $1200 somehow.

[bacchi]

That is interesting. My company contributes a $1800/year "pass through" to my HSA, but only at $150/month for every month that I contribute. So it's not a "match" in the traditional sense.

I guess if the company will do it and you pay the taxes...seems worth a try. Unless they can claw it back somehow.

I am going to try it, i just don't want to be in a position next October where i get a letter/phone call and they say i owe them $1200 somehow.

Unless it's specified in the plan documents, you'd just write a nice letter telling them to pound sand.