Author Topic: HSA with no HDHP  (Read 2255 times)

Spork

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HSA with no HDHP
« on: October 26, 2016, 04:04:08 PM »

I am currently looking at 2017 ACA coverage.  There is a new player in town that is significantly cheaper than our old friend Blue Cross (and they possibly has better in-network coverage).  The one gotcha: They did not make themselves HSA compatible.  Their max OOP is too high.  But the price difference is significant.  A $6750 HSA contribution does lower my MAGI and increase my subsidy... but the price is so much cheaper, it looks like almost a wash.

This leads to my question.  I had an HSA compatible HDHP for 2016 and put in my max contribution.  I have been tracking expenses towards it, but have never pulled any money out.  If I were to move to a non-HSA plan, how does this work for 2017?   I know I cannot make 2017 contributions.  But can I still track/apply medical expenses from 2017 -- even though I am not on an HSA compatible plan?


TaronM

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Re: HSA with no HDHP
« Reply #1 on: October 26, 2016, 04:27:19 PM »
The only limitation when you are no longer on a HDHP is that you can no longer make contributions to your HSA.  You can still do everything else with it, including leaving it to grow and tracking new expenses to eventually redeem to get it back out.

There are some HSA custodians that might start trying to make life difficult for you if you are no longer able to make contributions, however.  That's on them though, the government doesn't care if you are still on an HDHP or not other than not allowing new contributions to it.  If your custodian has extra fees or whatever associated with keeping the HSA with them when you can no longer make contributions, you should just transfer it to another custodian (which is also perfectly fine to do, from the government's perspective, after you are no longer eligible to make contributions).

therethere

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Re: HSA with no HDHP
« Reply #2 on: October 26, 2016, 04:32:58 PM »
I'm confused, the max out of pocket is too high so you can't have an HSA? I thought it was everything above xxxxx out of pocket qualifies as HDHP and HSA compatible.

Or are you saying that the max out of pocket is higher than the 6750/year you can put in an HSA and therefore you would be using up your whole contribution and then some?

Spork

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Re: HSA with no HDHP
« Reply #3 on: October 26, 2016, 04:37:52 PM »
I'm confused, the max out of pocket is too high so you can't have an HSA? I thought it was everything above xxxxx out of pocket qualifies as HDHP and HSA compatible.

Or are you saying that the max out of pocket is higher than the 6750/year you can put in an HSA and therefore you would be using up your whole contribution and then some?

My understanding of the rules for 2017
* Max contribution (family): 6750
* Min deductible (family): 2600
* Max out of pocket (family): 13,100

There seem to be a few plans in my area where the minimum deductible is correct, but the max out of pocket is off by just a few hundred dollars.

therethere

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Re: HSA with no HDHP
« Reply #4 on: October 26, 2016, 04:58:31 PM »
Wow I had no idea there was an upper limit. That's crazy! No way would I choose a health plan that risky that doesn't allow me to contribute to an HSA.

seattlecyclone

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Re: HSA with no HDHP
« Reply #5 on: October 26, 2016, 07:05:23 PM »
Money already in an HSA can be used for any medical expenses after you open the account, regardless of what health care plan you have at the time. An HDHP is only required in order to make new contributions.