HSA Contribution Amount

[Unkempt Stash]

Interesting question that I couldn't find a good answer to:

I have an HDHP and contribute to an HSA. My plan is a family (self + children) because I cover children.
My wife has an HDHP (self only) and contributes to an HSA.

Half way through the year, my wife changes insurance and is no longer eligible to contribute to the HSA.

Based on reading the IRS guidance, I think her max contributions is FamilyMaxHSA ($6750) * 1/2 (she is half of a couple) * 6 (months eligible) * 1/12 (months instead of years) = $1687.50

Since I'm still on a family plan, does that mean that I can contribute $5062.50? (Family Max - HerMax)

Thanks for any help,

Unkempt Stash

[Cromacster]

Your max as a family is 6,750.  Doesn't matter that she switched.  Just make sure she doesn't contribute to an FSA with her new plan.

[BlueLesPaul]

My reading of the applicable law is that you can split the family max any way you like.  Please see below IRS Notice 2008-59 Q&A 17

Q-17. How do the maximum annual HSA contribution limits apply to a married couple if both spouses are eligible individuals and one spouse has self-only HDHP coverage and the other spouse has family HDHP coverage?

A-17.   The maximum annual HSA contribution limit for a married couple if one spouse has family HDHP coverage and the other spouse has self-only HDHP coverage is the § 223(b)(2)(B) statutory maximum for family coverage. The contribution limit is divided between the spouses by agreement. See § 223(b)(5) and Notice 2004-50, Q&A-32. This is the result regardless of whether the family HDHP coverage includes the spouse with self-only HDHP coverage. See Notice 2004-2, Q&A-15. If only one spouse is an eligible individual, see Rev. Rul. 2005-25.

Example. For 2008, H and W are married. Both are 40 years old. H and W are otherwise eligible individuals. H has self-only HDHP coverage. W has an HDHP with family coverage for W and their two children.

The combined contribution limit for H and W is $5,800, which is the § 223(b)(2)(B) statutory contribution limit for 2008. H and W divide the $5,800 contribution limit between them by agreement.

If either of you is or will be 55 prior to the end of the tax year, you can do an additional  catch up contribution of $1000 each, subject to pro ration.  The $1,000 (or pro-rated amount, if less) must be put into each individual's account.