Author Topic: HSA, Switching Jobs & Having a Baby - Please Help!!  (Read 1888 times)

wonderfuffin

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HSA, Switching Jobs & Having a Baby - Please Help!!
« on: February 26, 2016, 05:04:10 PM »
Please Help!

I'll try and keep this as short and concise as possible. On March 31st/April 1st respectively my wife & I will both be laid off from our jobs at the same company (the different dates are due to different pay schedules). We both have separate HDHPs and HSAs which we will have contributed approximately the following amounts by our termination date (combined total between employees & employees contributions):

Wife: $240
Me: $500

Fortunately, I was able to find another job quickly and will be starting on March 31st (the same day I lose my current job). However, I will not be eligible for insurance with the new company until May 1st.

My wife will not be looking for employment as she is 14 weeks pregnant and she will be staying home to take care of the baby.

In April, we will be uninsured, however, we do not want her to miss her doctor's appointment for April, more specifically her next sonogram which should be the second week of April to determine the sex of the baby. She has been told by people at work that she should apply for MassHealth (for those who don't live in MA, MassHealth “provides comprehensive health insurance – or help in paying for private health insurance).

We believe she is eligible for enrollment because we won't be eligible for group coverage. However, we have questions:


- What happens on May 1st when I enroll in my new employers insurance plan?
- Does my wife being on MassHealth make us ineligible for HSA contributions the rest of the year (assume I enroll in a family HDHP plan with my new employer)? I've read supplemental insurance may make you ineligible for HSAs.

This is all making my head spin!

Dezrah

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Re: HSA, Switching Jobs & Having a Baby - Please Help!!
« Reply #1 on: February 27, 2016, 10:34:40 AM »
Congratulations on the baby.

It sounds like you only need gap coverage for one month. Honestly I'd just get COBRA for that month so you're not switching plans twice in the same amount of time.

Though maybe I'm misreading your comments. What do you mean you won't have group coverage? Is your old employer completely disappearing and dismantling the health plan? Does your new employer only offer coverage for the employee?

To other parts of your question, you and your wife are allowed to be on separate insurance plans though I suspect her eligibility in the plan at the new employer would disqualify her from this MA plan (I'd look this up tho).

For the sake of argument though let's assume you're on HSA, she's on PPO. SHE is allowed to continue to use HER HSA funds already accumulated to pay HER bills but cannot contribute more. You can keep doing the normal HSA thing in your own account expect the fund limit is the same as for a single person, not a family.

If any person is covered by both an HSA and a non-HSA qualified plan, they cannot contribute to an HSA account for those months.

HSA contributions allowed in a calendar year are a little bit tricky when you're partially covered through the year. If you are HSA eligible in the month of December, you are allowed to contribute the maximum allowed for the year even if you were only covered for the one month, BUT you have to RETAIN HSA coverage until December of the next year or face a penalty.

If your coverage stops before December, you are allowed to contribute a portional amount of the maximum allowed. For example, if you had HSA coverage for January, February, and March, you could contribute 3/12ths of the maximum.

You should also see your HR department; it's their job to make sure you safely navigate the stuff on their end after all.

In any case, just breathe, do some reading, and take your time. You already have a job so I don't doubt you'll be fine. Good luck.

thingamabobs

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Re: HSA, Switching Jobs & Having a Baby - Please Help!!
« Reply #2 on: February 27, 2016, 11:16:47 AM »
If it's only for 1 month, I'd push back the appt/sono until your new insurance kicks in. (assuming prior appointments have been without issue) If anything happens in that month, you can apply for COBRA within the grace period.

historienne

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Re: HSA, Switching Jobs & Having a Baby - Please Help!!
« Reply #3 on: February 27, 2016, 11:54:38 AM »
If your wife is having a baby later this year, I'd run the numbers very carefully before signing up for a HDHP in your new job.  In most hospitals, a basic unmedicated vaginal birth will still run you $5000 or more (sometimes much more).  Any extras or complications (epidural, C-section, NICU stay) will quickly push that figure up by thousands, or tens of thousands, of dollars.  Unless you will save enough money on the HDHP to fully cover the 8 months of extra premium cost, I would sign up for a non-HDHP plan for the rest of 2016 and plan to switch back to the HDHP plan in 2017. 

I would not push back the ultrasound.  It's not intended primarily to determine sex, but to screen for anatomical problems.  Some of these problems can be resolved in utero through surgery.  Others are serious enough that many couples would choose to terminate the pregnancy.  You want to discover those issues as soon as possible, so that there is time to perform any possible interventions. 

FWIW, I am facing a very similar coverage gap this year, except that I am due to give birth in the 12 day gap between when my current coverage will end and when I will become eligible for coverage through my new job.  I plan to pay for COBRA - but I don't live in MA, so my state options aren't particularly good.

little_brown_dog

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Re: HSA, Switching Jobs & Having a Baby - Please Help!!
« Reply #4 on: February 27, 2016, 04:15:13 PM »
I second the suggestion to just stay on via COBRA if that is an option, given it is only for one month. COBRA will probably be more expensive than masshealth, but it should theoretically make up for that in terms of ease of use (if you switch her to a different plan, then you need to change that at her doctor's office, reassign a primary care provider, all the stuff you need to do every time you switch insurances). Then she can just jump onto your coverage May 1.