Author Topic: COBRA, HSA, and layoff - how can I get my $6750 invested pre-tax in 2018  (Read 1680 times)

homestead neohio

  • Pencil Stache
  • ****
  • Posts: 854
    • Journal - Seeds Sprout
I'm being laid off the end of Dec 2017, severance will be paid in Jan 2018.  I can continue on my employer's healthcare some period of time via COBRA.  From what I understand, HSA compliant plans are not common with the ACA, and may or may not be more widely available in 2018, depending on legislative changes.

My question is, if I do not have an affordable HSA compliant plan available on 1/1/18, could I continue health benefits for 1 month via COBRA, fund my HSA 100% in that month, then change to a non-HSA plan of some sort?  Anyone have experience with this?

rubybeth

  • Handlebar Stache
  • *****
  • Posts: 1402
  • Location: Midwest
I'm being laid off the end of Dec 2017, severance will be paid in Jan 2018.  I can continue on my employer's healthcare some period of time via COBRA.  From what I understand, HSA compliant plans are not common with the ACA, and may or may not be more widely available in 2018, depending on legislative changes.

My question is, if I do not have an affordable HSA compliant plan available on 1/1/18, could I continue health benefits for 1 month via COBRA, fund my HSA 100% in that month, then change to a non-HSA plan of some sort?  Anyone have experience with this?

Do some research. Visit your state's exchange and providers in your state who you could buy direct from if the exchange doesn't exist for 2018. I've found in my state, HSA plans are just as common as non-HSA eligible plans. They are generally cheaper, too, so if you're unemployed, it's probably a better deal than COBRA. And yes, as long as you have an HSA eligible plan, you should be able to fund it however much you want. Some people may actually opt to put in all the funds at the beginning of the year, because on a HDHP if you use the coverage in January or February, not having much in the HSA kinda sucks.

ZiziPB

  • Magnum Stache
  • ******
  • Posts: 3317
  • Location: The Other Side

homestead neohio

  • Pencil Stache
  • ****
  • Posts: 854
    • Journal - Seeds Sprout
You may want to read this:

http://www.hsaedge.com/2014/03/25/hsa-last-month-rule-and-testing-period-explained/

Thanks, ZiZiPB.  This is excellent. 

Carrying HSA compliant coverage for only Jan 2018 would allow me 1/12th of the max limit.  If I have no HSA coverage for most of 2018, but get it on or before Dec 1, 2018, I can use the "Last month rule" to contribute the max, but then have to maintain the HSA complaint health plan for at least 12 full months or face both taxes and penalties on over-contributed amount. 

Iplawyer

  • Bristles
  • ***
  • Posts: 308
I disagree that most ACA compliant plans don't meet HSA rules.  We have one that does.

Gin1984

  • Magnum Stache
  • ******
  • Posts: 4834
My mom has a HSA compliant plan as well, in California.  But this is all state based.  Which can suck for people who's state's did not get on the ACA bandwagon.

Sent from my SPH-L710 using Tapatalk